lipi 


uii 


iii 


.:mm»-% 


UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


SUMMARY 


OF 


THE  LAW  OF  SET-OFF: 

WITH 

AN  APPENDIX  OF  CASES 

ARGUED  AND  DETERMINED 

IN   THE 

COURTS  OF  LAW  AND  EQUITY 

UPON  THAT  SUBJECT. 


BY  BASIL  MONTAGU,  ESQ. 

Of  Gray's  Imi,  Burrister  at  Law. 


c:*>tm»>-::::' 


XRW-YORK: 


PRINTED    nv    AND    FOR    I.    HILEY    Sc    CO. 

lLe,citvi)ograpbtc  Prfw* 
18GG. 


T 


KriL 


3  3^00! 


TABLE  OF  CITED  CASES. 


("The   figures  which  immediately  follow  tlie  names  refer  to  the  Summary,  and 
tliose  which  stand  in  the  column  refer  to  the  Appendix.] 


ABSOLOM  V.  Knight,  page  18. 
Atkinson  v.  Elliot,  48,  51,  52. 

Barclay  v.  Hunt,  5. 
Barker  v.  Braham,  5. 
Barnes  v.  Crafter,  7. 
Baskerville  v.  Brown,  38,  45. 
Bavlev  v.  Morlev,  31. 
Billon  V.  Hyde,  58. 
Bishop  V.  Church,  34. 
Bize  V.  Dickason,  32. 
Blackbourn  v  Mattliias,  42. 
Bottcmley  v.  Brook,  2". 
Brown  v.  BuUen,  57. 
Bulman  v.  Burkitt,  36. 
Butler  V.  Innys,  6. 

Clenlowe  v.  Lowe,  6. 
Cockran  v.  Rt.binson,  40. 
Collins  V.  Collins,  20,  45. 
Colson  V.  Welsh,  19,  49. 

pale  V.  Sollet,  1. 
Decze,  Ex  parte,  47,  49. 
Dennie  v.  Elliot,  11. 
Dickson  v.  Evans,  56. 
Dobson  V.  Lockhart,  2,  54,  55. 
Dowsland  v.  Tliompson,  44. 
Drinkwater  v.  Dowding,  29 
Dunmore  v.  Tavlor,  21. 
Duthy  V.  Tito,  7. 

Edwards,  Ex  parte,  62. 
Evans  v.  Prosser,  35. 

Fletcher  v.  Dyche,  23. 
Ford  V.  Miles,  6. 
Freeman  v.  Hyctt,  22 
French  v.  Andradc,  25. 
V.  Fenn,  25. 

George  v.  Claggett,  31. 
Gibson  v.  Hudson's  Bay  Co.  28. 
Glai.stcr  v.  Hewer,  10. 
Gower  V.  Hunt,  41. 
Graham  v.  Fraine,  18. 
Green  v.  Farnur,  1 
Grimwood  v.  Barrit,  44. 
Groomc,F.x  parte,  54. 
Gross  V.  Fisher,  37. 
Grove  v.  Dubois,  32,  57 


App. 


42 


Hale,  Ex  parte,  56. 
Ht.ll  V.  Ody,  14. 
Hampton  v.  Jarrat,  41. 
Hancock  v.  Entwissle,  53. 
Hankey  v.  Smith,  49. 
Hooper  v.  Till,  36. 
Howlet  V.  SU-ickland,  22. 
Hutchinson  v.  Sturges,  19 


James  v.  K^Tinier,  3. 
27  Jacques  v.  Withy,  20. 
Jeffs  V.  Wood,  48. 

Kilvington  v.  Stevenson,  35 
Knibbs  V.  Hall,  38. 

Lanesborough  v.  Jones,  47,  61. 
Laycock  v.  Tufthel,  18. 
Lechmere  v.  Hawkins,  39 
33    Lofting  v.  Stevens,  28. 
Lock  V.  Bennet,  56. 


12 


17 


M.irch  V.  Chambers,  56. 
Martin  v.  Winder,  36. 
Meliorucchi  v.  Exchange,  28 
Mitchell  V.  Oldfield,  9. 
Mordecai  v.  Nuling,  7. 
Morland  v.  Hammersley,  12. 
Muiray,  Ex  parte,  30. 

NedrifF  v.  Hogan,  21. 
Nunez  v.  Modjgliani,  6. 


41   O'Connor  v.  Murphy,  11 
Ockenden,  Ex  ]Kute,  50. 
21   Ord  V.  Kuspini,  21,  41 

17   Pitt  V.  Carpenter,  37. 
21    Powell  v.  Smith,  7. 
19    Prtscot,  Ex  parte,  52 
Puller  v.  Roe,  26. 


Qiiintin,  Ex  parte,  62. 


Rabone  v.  Williams,  31. 

Randle  v.  Fuller,  12. 

Rtnnington  t.  .Stt  \ens,  45 
54   Reynolds  v.  Bccring,  35 

RobeHs  V.  Bijrgs,  9. 

Rudge  V.  Biroli,  27. 
25   Ryal   v.  Row  Is,  48. 


App. 
12 

47 

46 

17 

39 

5 

57. 


2B 
13 


21 


10 

16 


14 


VI 


TABLE  or   CITED  CASES. 


Sapsforcl  v.  Fletcher,  18. 
Schoole  V.  Noble,  11. 
Sciimshirc  v.  AUU rton,  29. 
Scoliin  V.  Robinson,  7. 
Scott  V.  Surman,  SO. 
Sliij)iTian  V.  Thompson,  34. 
Slipper  V.  Stidstone,  25. 
Smith  V.  Barrow,  23. 

V.  De  Silva,  2.3. 

V.  Hodson,  52,  59. 

Stacy  V.  Decy,  26. 
Sturdy  v.  ATiumd,  2. 
Symmons  v.  Knox,  43. 


App. 

14  Tegetmeyer  V.  Lutnley,  35. 
11    Terlo  V.  Lowe,  8. 

Thrustout  V.  Grafter,  9- 

Tito  V.  Duthy,  7. 

Turlington's  case,  5. 


30 
20 


Vaughan  v.  Davies,  13. 


Webster  v.  Scales,  27. 
49   Weighail  v.  Waters,  22. 
30,37   Whitehead  v.  Vaughan,  55. 
4   Wills  V.  Crabb,  7- 
44   Winch  V.  Keely,  27. 
Wood  V.  Akers,  33. 


TABLE  OF  CONTENTS. 


Analysis, 
Introductory  Chapter, 

Set-off  at  Law, 


BOOK  L 


Section  L 
Set-off  at  Common  Law, 

Section  II. 
Set-off  by  Statute,     ----- 

Chap.  I. 
Set-off  in  General,  .         _         . 

Chap.  II. 
Set-off  in  the  Case  of  Bankrupts  and 
Insolvent  Debtors, 


Set-off  in  Equity. 
Practice, 


BOOK  IL 


App. 
7 

n 

18 


5 

ib. 
15 
ib. 

46 


61 
63 


>et-off.[23  n.  AtComm 

At  Law.  [5]      <! 

til.  ByStatui 
[I.  In  Equity. [6 1] 


ANALYSIS. 


t 


I.  Connected  accounts.  C'l      f".  They  aie  the  subjects  of  Set-off.  [2] 


Unconnected  accounts.  [!]■ 


I.  At  Common  Law.  [5] 


II.  M.dei  of  set-off.  [3]  J,  LH.  By  Statute, 

lI.InEquity.[61] 


c./ 


I.  In  General.  [15] 


(The  figures  refer  to  tlie  page  in  tlie  Summary. 


'T.  Requisites  to  enable  i 

give  a  sct-ofi  in  cviUt^cc.  | 


II,    Of  a  person's  option  to  \ 


ri.  The  demand  of  each  party  f  I.  The  demand  of  the  plaintiff.  [  1 8] 

f  I.  There  must  be  mutual  debts.[  17  k      mus.t  be  a  dcOc.lXH]  < 

a  person  to      I  (^  II.  The  demand  of  the  defendant.  [ 
ience-Li?]      < 


11.  The  debt  of  each  party  must  be  due 
nghfy  except  in  the  case  of 
and  Admii  istrators,  when 
be  due  bt-twecn  the  testator 
_     or  intestate  and  the  other  purty.  [22] 


II.  The  debt  must  be  due  at  tlie 


cncement  of  the  a 


.C35] 


ivail  iiimselfof  his  right  1 


III.  Of  tlie  plea<  higs  and  of  the        fl.  Of  the  defendant's  optioi 

mode  of  setting-ofidebts.  [39]  <^      notice  ;  and  wliich  mode  is  to  be  prtfcrred.  [40] 


l-off.  [37] 


[20] 

I.  Joint  and  several  debts.  [23] 

II.  Trustees.  [27] 

III.  Principal  and  Agent.  [29] 

IV.  Husband  and  Wife.  [33] 

_V.  Executor  and  Administrator.  [34] 


IV.  The  Judgment.[45] 


II.  Of  the  nature  of  the  notici 
^     and  of  die  pltadint^s.  [41] 


{;. 


The  Notice.  [41] 
The  Pleadings.  [42 


II.  In  particular  Cases.  [46] 


{I.  The  Plea.  [42] 
II.  The  Replicatiol 

f  I.  By  the  particular  Statute  in      f  I.  Requisites  for  a  balance    fl.  Mutual  debts  oi 
ri.  In  Bankruptcy.  [46]        -^      tnecaseof  bankruptcy.  [46]    <J      of  accounts.  [47]  < 


[44] 
credits.  [47] 


fl.  The  demand  on  either 
be  a  debt  or  a  credit.  [ 


side  must 

[47] 


II.  The  debt  must  be  due  or  TI.  It  i 
tilt  credit  exist  bLlwecll  tlie  j 
panics  before  the  bankmpl-^ 


II.  The  demand  must  be  due  to 
the  bankrupt  and  to  the  crtditor 
ill  their  own  rights  respective- 
ly.  [47] 

St  exist  bffire  the  bankmlMy.  [52] 


II.  Modes  of  h 
.II.  By  the  general  Statutes  of  Set-off.  [58] 


L     cy.[52] 
:ing  the  accounts.  [56] 


11.  It  must  exist  betwent  the  /tarries  before 
L    the  bankruptcy.  [55] 


\ll.  In  insolvency.  [59] 


SET-OFF. 


INTRODUCTORY  CHx\PTER. 


W  HEN  there  are  opposite  demands  between  two  persons, 
and  the  accounts  are  connected  by  originating  in  the  same  trans- 
action, or  by  any  subsequent  agreement,  the  balance  is  the 
debt,  and  is  the  sum  reco\'erable  by  suit.  When  the  accounts 
are  unconnected  by  originating  and  by  continuing  in  distinct 
transactions,  each  demand  is  a  legal  debt,  and  recoverable  by  a 
separate  action ;(«)  but  such  accounts  may  be  balanced  by  set- 
ting ofFoiic  debt  against  the  other,  either  at  law  or  in  equity. 


(c)  In  Green  v.  Farmer,  1  Biackst.  Rep.  651,  8  G.  III.  Lord  Mansfield. 
"  The  justice  of  allowing  cross-demands  is  supported  by  natural  equity  : 
the  buhaice  only  is  really  due  in  such  cases.  But  the  common  and  establish- 
ed forms  of  law  have  in  i^eneral  directed  separate  remedies  to  be  mutually 
liad  by  different  actions  :  and  tiiOUgh,  where  the  nature  of  the  transaction 
consists  in  a  variety  of  receipts  and  payments,  tlie  law  allows  the  balance 
only  to  be  the  debt ;  yet,  where  the  mutual  debts  stand  unconnected  with 
each  other,  the  laiv  hath  .mid,  they  slvall  not  be  set-off:  and  courts  of  equity 
have  followed  this  rule,  merely  because  it  was  the  law."  So  in  Burr.  2221, 
Lord  Mansfield  says,  tlie  statutes  of  set-off  seem  to  refer  only  to  nnitual 
unconnected  debts  :  for  at  commtjn  law,  where  the  nature  of  the  employment 
necessarily  constituted  an  account  of  receipts  and  payments,  debts  and  cre- 
dits, the  balance  only  was  the  debt. 

Dale  V.  Sollet,  4  Burr.  Rep.  2133.  A.  D.  1767.  Action  for  money  had 
and  received — non-assumpsit : — issue.  The  defendant,  a  ship-broker,  was 
the  plaintiff's  agent  in  suing  for  and  rccoverhig  a  sum  of  money  for  damages 
done  to  the  plaintiff's  ship  ;  and  did  recover  and  receive  2000/.  for  tiie  plain- 
tiff's use,  and  paid  him  all  but  40/.  which  he  retained  for  his  labour  and 
service  therein,  which  the  witness  (Mr.  fuller)  swore  lie  thought  to  be  a  rea- 
sonable allowance  ;  and  tlie  jury  were  of  opinion,  "  that  the  defendant  ou^lit 
to  retain  40/.  as  a  reasonable  allowance  ;"  consc(juentiy  the  plaintiff  was  not 
entitled  to  recover.  Tlie  piainlifl" objected  al  tlie  trial,  "  that  liie  (kfcndant 
rouid  not  give  n-ldrtice  in  this  manner,  of  tiiis  labour  and  service  ;  but  oui^ht 
'■o  ha--"  fiir(ide(f  '■'  bu  tvmi  of  hvi.-»J}\  or  at  least  have  jjivcn  nodct  of  it  as  a 

B 


SET-Oir 


The  hiw  relating  to  the  balancing  of  unconnected  dccounta  is 
called  the  law  of  set-otF. 


set-off'."  A  verdict  was  found  for  the  plaintiff,  subject  to  the  opinion  of  tlie 
court ;  and  if  the  court  should  be  of  opinion  against  him,  then  judgment  to 
be  entered  as  upon  a  nonsuit — Accoidingly  Mr.  Dunning  moved,  on  behalf 
of  the  defendant,  "  that  judgment  might  be  entered  against  tlie  plaintifY,  as 
upon  a  nonsuit,"  and  had  a  rule  to  shew  cause.  Lord  Mansfield  had  no 
doubt  of  the  defendant's  being  at  liberty  to  give  this  evidence.  This  is  an 
action  for  money  had  and  received  to  the  plaintiff's  use.  The  plaintiff  can 
recover  no  more  than  he  is  in  conscience  and  ecjuity  entitled  to,  which  can 
be  no  more  than  -what  rernaws  after  deduct'nii;  all  just  allowances,  which  the 
defendant  has  a  right  to  retain  out  of  the  very  .'mm  demanded.  This  is  not  in 
the  nature  of  a  crons  demand  or  mutual  debt :  it  is  a  charge  which  makes  the 
sum  of  money  received  for  tlie  pluintifi's  use  so  much  If-j.-.  The  two  other 
judges  conciirred.  Per  curiam.  Judgment  for  the  defendant,  as  on  a  non- 
suit. 

Dobson,  assignee  of  Patrick,  v.  Lockhart,  5  Ter.  Rep.  135.  A.  D.  1793. 
(Appendix  1.)  '  Action  for  goods  sold  and  delivered.  General  issue  and  set- 
off, "  That  the  defendant,  before  the  bankruj^tcy,  had  executed  two  bonds  as 
surety  for  the  plaintiff,  on  agreement  (inter  al.)  that  the  defendant  should  re- 
tain such  money  as  should  at  any  time  be  due  from  the  defendant  to  the  bank- 
rupt, in  respect  of  any  dealings  between  them  in  trade,  until  the  two  first 
bonds  should  be  satisfied  ;  and  that  the  defendant  should,  out  of  the  money 
which  should  be  due  from  him  to  tlie  bankrupt,  retain  and  set-off  so  much 
money  as  he  should  at  any  time  pay  on  the  two  first  bonds  ;  that,  after  the 
bankruptcy,  the  defendant  paid  part  of  the  money  for  which  he  was  surety  ; 
that  the  money  due  from  the  defendant  to  the  bankrupt  was  due  on  account  of 
dealings  between  them  in  the  course  of  trade.  Sec.  Sec."  Lord  Kenyon  non- 
suited the  plaintiff,  with  liberty  to  move  to  enter  up  a  verdict  for  him,  if  the 
court  should  be  of  opinion  that  he  was  entitled  to  recover.  Upon  a  motion 
for  this  purpose, 

Lord  Kenyon,  The  defendant  had  various  transactions  v/ith  the  bankrupt  ; 
amoi.g  other's,  he  became  surety  for  him  in  two  several  sums  of  money,  and, 
at  tlie  time  of  becoming  such  security,  the  latter  engaged  that  the  defendant 
should  not  be  called  upon  to  pay  for  the  goods,  until  he  was  indemnified 
against  those  bonds.  The  agreement  is  valid  and  a  good  defence,  under 
the  general  issue,  to  this  action. 

Ashhurst,  J.  This  case  falls  within  the  stat.  5  Geo.  IL  c.  30.  §  28. 
BuUer  and  Grose,  Justices,  of  the  same  opinion  with  Lord  Kenyon. 
Sturdy  v.  Amaiid,  3  T.  R.  599.  A.  D.  1790.  (Appendix  4.)  Action  on 
bond  by  the  assignees  of  a  bankrupt  for  securing  the  payment  of  an  annuity 
at  ceitain  times  in  the  year  :  before  the  first  instalment  became  due  the  obli- 
gor lent  to  the  obligee  200/.  and,  in  order  to  secure  tlie  repayment,  the  obligor 
was  authorised,  by  an  instrument  under  the  hand  of  the  obligee,  to  retain  the 
payments  of  the  annuity  from  time  to  time,  till  the  200/.  and  interest  \yas 
paid.  The  obligee  became  a  bankrupt  before  the  200/.  was  repaid.  The 
assignees  brought  debt  on  bond  for  the  arrears.  The  obligor  pleaded  the 
agreement.     The  plaintiff  replied  the  bankruptcy  of  the  obligee  before  either 


SEX-OFF. 


This  sumiTiary  of  the  lawof  set-ofifis  divided  into  tv.o  books; 
tlie  first  is  appropriated  to  "  Set  off  at  Law  ;''''  the  second  con- 
tains a  few  decisions   upon  "  Set -off  in  Equity.''''     The  first 


of  the  quartcriy  payments  becanic  due.  Demun-er  and  joinder.  The  court 
were  clearly  of  opi'.iion  that,  v.itiiout  any  relation  to  the  iaA\  of  lien  or  set-off, 
the  demurrer  was  valid.     Jud;<ment  for  defendants. 

James  V.  Kymiier,  5  Ves.  Juii.  108.  x\,  D.  1799.  (Appendix  5.)  In  1789, 
Rice  James  aiid  Richard  Bcckford,  partners,  borrowed  19,000/.  on  their  joint 
and  several  bonds,  and  on  the  assit^nment  of  a  mortgage.  Of  the  money 
borrowed  2,500/.  was  advanced  by  Mure  8c  Co. 

In  May  1790,  an  agreement  was  entered  into  for  the  sale  of  James's  inter- 
est in  the  partnership  to  James  Keighley,  for  30,500/.  payable  by  instalments. 
A  sum  of  money  was  deposited  by  Keighley,  and  the  securities  were  to  be 
chan'j;ed.  In  October  1793,  the  IMures  applying  for  payment  of  their  bond, 
Beckford  said  it  was  not  then  convenient;  upon  which  they  requested  that 
they  might  be  accommodated  with  such  sum  of  2,500/.  as  a  loan,  to  be  re- 
paid at  a  future  period.  Keighley  offered  to  lend  part  of  the  money  depo- 
sited by  him  in  puisuance  of  the  agreement  for  the  purchase  of  James's 
share  in  the  partnership,  if  James  would  consent.  Robert  Mure  accordingly, 
upon  the  21st  of  October,  wrote  to  James,  stating  their  want  of  money — . 
ti;e  application  to  Beckford  to  relieve  them — "  by  an  application  to  Mr, 
"  Keighley  to  take  up  your  debt  to  us  secured  upon  ^\  illiam  Beckford's 
"  estate,  either  wholly,  or  to  accommodate  us  with  the  amount  upon  our  en- 
"  gaging  to  repay  it  at  a  future  period  :  this  latter  mode  Beckford  told  me 
"  would  be  most  agreeable  to  him  ;  and  that  he  would  mention  it  to  Keighley." 

The  letter  proceeded  to  state  that  Keighley  had  no  other  money  disengaged 
but  what  is  lying  at  the  banker's  to  be  paid  to  James  upon  the  signature  of 
the  deeds  ;  but  professes  himself  ready  to  acconmiodate  them,  provided 
James  will  give  his  consent  to  his  appropriating  so  much  of  the  money  to 
that  purpose. 

Upon  this  letter  James  came  to  London,  and  received  from  Keighley  2,500/. 
wJ^ich  he  immediately,  upon  the  24th  of  October  1793,  delivered  to  the 
Mures  ;  and  he  received  from  them  a  promissory  note  for  that  amount, 
payable  to  him  three  months  after  date.  Upon  the  31st  of  December  1793, 
the  Mures  became  bankrupt.  Since  1793  the  interest  upon  the  debt  to  the 
Mures  was  puid  uj)  to  1797,  by  Beckford  and  Keighley,  or  by  Keighley  after 
the  death  of  Beckford. 

The  bill  was  hied  by  James,  praying  tliat  it  may  be  declared,  that  the  sum 
<jf  2,500/.  paid  by  the  plaintiff  to  the  Mures,  was  a  payment  or  part  payment 
of  the  debt  then  owing  to  tiiem  from  the  pluintiiland  Beckford  ;  or  that  the 
plaintiff*  is  entitled  to  have  such  payment  set  olf  against  such  debt  ;  that  an 
account  may  be  taken,  kc. 

Lord  Chancellor.  Is  there  any  doubt,  that,  where  there  are  upon  account 
mutual  credits  between  two  parties,  though  they  cannot  set-off  at  law,  yet  it 
is  the  common  ground  of  a  bill  ?  If  James  had  brought  an  action  against 
Mure  upon  the  note,  supposing  no  bankruptcy  had  taken  place,  1  si  ould  have 
slopped  that  action  while  he  was  a  debtor  upon  the  bond.     \\  her.  there  comes 


SET-Oi  i- 


book  is  subdivided  into  t\vo  sections  ;  the  first  section  relates 
to"  Set-off  at    Common  Laiv ;''''  the  second  to"   Set-off  by 


Statute.' 


a  case  of  bankruptcy,  it  is  much  stronger ;  between  solvent  persons,  there 
might  be  a  ground  to  say,  indulgence  was  given,  the  credit  extended,  and 
therefoi'e  that  credit  ought  to  be  continued.  But  the  moment  a  bankruptcy- 
comes  the  account  is  to  be  settled.  They  mighit  sue  Beckford's  executors  at 
law,  but  I  should  stop  the  action.     Therefore  there  is  a  clear  mutual  credit. 

Lord  Chancellor.  I  have  not  a  particle  of  doubt  upon  this  case,  wliich  is 
the  clearest  I  ever  heard. 

At  the  time  of  this  transaction  the  Mures  had  not  accepted  Keighlcy,  nor 
given  up  the  particular  bond.  The  trimsaction  of  the  change  of  the  partner- 
ship was  not  then  a  completed  transaction.  Under  these  circumstances 
Keighley,  going  on  with  the  purchase,  had  money  applicable  to  the  settle- 
ment of  that  transaction,  Avhen  the  business  could  be  finished.  The  applica- 
tion was  made  to  James,  that  he  would  agree,  that  that  money  should  go  to 
the  relief  of  the  Mures,  creditors  of  the  partnership.  The  mode  in  which 
he  does  it  is  by  taking  this  note.  The  transaction  going  on  between  Keighley 
«ind  him,  I  never  would  let  him  proceed  upon  that  note.  The  fact  is  beyond 
a  doubt,  that  the  partnership  effects  of  Beckford  and  James  have  paid  this 
debt  to  the  Mures.     The  decree  must  be  according  to  the  prayer  of  the  bi'll. 


BOOK  I. 

SET-OFF  AT  LAW 


SECTION  L 

SET-OFF   AT   COMMON   LAW. 

If  one  of  two  persons,  between  whom  there  have  been  mutual 
dealings,  for  the  purpose  of  arresting  the  other,  sM'ear  to  the 
sum  due  to  him,  ^\-ithout  deducting  the  sum  for  M'hich  he 
knows  himself  to  be  indebted,  it  is  an  evasion :  and,  if  not 
ground  enough  to  support  an  indictment  for  perjury,  ^vill, 
at  least,  entitle  the  defendant  to  an  action  for  a  malicious  pro- 
ecution.((^) 

If  different  parties  to  different  actions  on  policies  of  insu- 
rance enter  into  the  rule  to  consolidate,  the  interlocutory  costs 
of  one  action  may,  upon  motion,  be  set-off  against  the  interlo- 
cutory costs  of  the  other.(c) 


{b)  Tyd.  K.  B.  35. — In  Barclay  v.  Hunt,  4  Burr.  1996.  7  Geo.  III.  which 
Avas  a  question,  whether  the  assignees  of  a  bankrupt  could  hold  to  bail  upon 
an  affidavit  in  these  words — "  as  appears  to  these  deponents,  by  the  last  ex- 
ammation  of  the  bankrupts,  and  as  these  deponents  \erily  believe."  Lord 
Mansfield,  in  delivering  the  opinion  of  the  court,  siiid  to  an  observation  of 
Sir  Fletcher  Morton's,  "  that  bills  may  have  been  paid  aftei-  the  last  exami- 
nation." If  that  were  really  the  fact,  it  would  not  save  the  person  who 
should  swear  in  the  evasive  manner  that  this  afiidavit  would,  in  such  case, 
be  expressed,  either  from  losing  the  security  of  bail,  or  from  criminal  ob- 
servation :  he  miglil  surely  be  indicted  for  pei'jury,  upon  such  an  evasive 
call),  as  it  would  upon  that  supposition  be.  In  Dr.  Turlington's  case,  he 
swore  to  the  sum  due  upon  one  side  of  the  account  only,  without  regarding; 
the  other  side  uf  it ;  but  that  was  a  mere  evasion,  and  so  treated.  So  in  a 
case  from  Plymouth,  there  was  a  like  manner  of  swearing  :  and  it  was  con- 
sidered as  a  gross  evasion  ;  for  the  balance  is  the  point  in  question,  and  nei- 
ther side  of  the  account  can  be  taken  of  itself  without  the  other. 

Barker  v.  Braham,  2  Blackst.  869.  3  Wils.  396,  H.T.  13  G.III.  (Appen- 
dix 8.) — Blackbtone,  J.  says,  the  courts  have  been  gradually  extending  this 
equitable  remedy.  In  the  outset  of  a  suit  they  compel  the  plaintiiV  to  make 
a  set-oflin  the  affidavit  to  hold  to  bail,  and  will  not  sufler  him  to  swear  to  one 
side  only  of  the  account. 

(c)  Nunez  v.  Modigliuni,  1  II.  Blackst.  217.  A.  D.  1789.  In  I'.aster  term 
1788,  the  plidmifr  brought  several  uclioiis  ajjuiDbt  tlic  dcftudant,  and  liic  other 


SET-OFF     AT     COMMON     LAW 


Opposite  demands  arising  upon  judgments  may  upon  mo- 
tion,(r/)  be  set-off  against  eaeh   other,(6')  wlienever  such  set 


underwriters,  on  two  policies  of  insurance ;  the  first  effected  m  the  year 
1784,  on  a  homeward-bound  ship  of  the  intestate's  ;  the  second  in  1785,  on 
the  same  ship,  outward-bound.  The  same  parties  underwrote  both  the  po- 
licies. The  actions  on  each  being  respectively  consolidated,  Aathan  Modigliaiii 
was  made  defendant  in  the  former,  and  Hunnand  Modigliani  in  the  latter. — 
When  the  first  came  on  to  be  tried,  on  an  application  from  the  defendants' 
attorney,  it  was  put  off  to  a  future  time,  on  his  consenting  to  pay  the  plain- 
tiff the  costs  of  the  day  ;  and  an  order  of  nisi  prius  for  that  purpose  was 
afterwards  made  a  rule  of  court.  The  action  on  the  second  policy  was  to 
have  been  tried  at  the  sittings  after  Hilary  term  ;  but  the  plaintiff  withdrew 
the  record,  and  thereby  became,  though  an  administrator  (Cont.  2  Comp. 
Prac.  476)  liable  to  pay  the  costs  of  the  action.  The  costs  of  the  first  action 
having  been  taxed,  and  allowed  to  the  plaintiff— A  rule  was  granted  to  shevir 
cause  why  the  prothonotary  should  not  review  liis  taxation,  and  why  the 
costs,  which  should  be  taxed  and  allowed  to  the  defendant  in  the  second  ac- 
tion, should  not  be  set-off  against  those  taxed  and  allowed  to  the  plaintiff  in 
the  first.  The  court  said  it  was  consistent  with  justice  to  allow  the  set-off, 
as  the  defendant  JVathan  Modigliani  was  a  party  to  both  actions  ;  in  one,  be- 
ing made  defendant  on  the  record  ;  in  the  other,  being  within  the  rule  to 
consolidate. — Rule  absolute. 

((•/)  Previous  to  the  year  1791,  it  seems  to  have  been  siipposed,  that  this 
rigiit  to  set-off  judgments  depended  upon  the  statutes  of  set-off.  In  Nunez 
v.'Modigliani,  1  H.  Bl.  217.  A.  D.  1789.  Bond  and  Le  Blanc,  Serjeants, 
urged,  that  the  costs  in  one  action  could  not  be  set-off  against  those  in  ano- 
thar,  where  there  were  different  defendants.  If  the  defendant  had  been  the 
same  in  both,  it  would  alter  the  case  ;  but  costs  due  frorn  A.  to  B.  shall  not 
be  set-off  against  those  due  from  A.  to  C.  This  would  not  be  authorised  by 
the  statutes  of  set-oft' :  and  the  court  will  not  interfere  and  create  a  set-off, 
which  those  statutes  do  not  allow.  There  is  the  same  species  of  argument 
in  O'Connor  v.  Murphv,  1  H.  Bl.  1791.  A.  D.  1791  ;  but  in  Mitchell  v.  Old- 
field,  4  Term  Rep.  123.  A.  D.  1791,  (Appendix  13)  Bearcroft  observing, 
that  tliis  was  not  such  a  debt  as  could  be  set-off  under  the  statute,  Lord  Ken- 
3on,  C.  J.,  said,  that  this  did  not  depend  on  the  statutes  of  set-off,  but  on  the 
general  jurisdiction  of  the  court  over  the  suitors  in  it :  that  it  was  an  equita- 
ble part  of  their  jurisdiction,  and  had  been  frequently  exercised. 

(e)  This  equitable  practice  seems  not  to  have  been  permitted  before  24 
Geo,  II.  In  H.  T.  4  Geo.  II.  in  K.  B.  Butler  v.  Innys  Sc  Ux.  2  Str.  891.— 
The  plaintiff  sued,  as  a  pauper,  and  was  nonsuited  ;  after  which  he  brought 
a  second  action  and  recovered  ;  and  Strange  moved  on  behalf  of  the  defen- 
dants, that  the  costs  in  the  first  action  might  be  deducted  out  of  the  recovery 
in  the  second;  but  it  was  refused.  In  E.  T.  12  Geo.  II.  in  C.  B.  Ford  v. 
Miles  et  e  contra,  stated  in  Clenlow  and  Lowe,  Barnes  130.  The  court  of 
Common  Pleas  denied  to  set  costs  against  costs.  In  T.  T.  16  Geo.  II.  m  C. 
B.  Goodtitle  on  demise  of  Clenlow  and  Wife  v.  Lowe  and  Lowe,  and  Lowe  v. 
Lowe  (q.  if  not  Clenlow)  in  case  2  Barnes  130.  Rule  obtained  on  the  motion 
of  Clenlow,  upon  affidavit  of  Lowe's  insolvency,  to  shew  cause  why  the  costs 


SET-OFF    AT     COMMON     LAW. 


off  is  equitable, (y)  though  the  judgments  are  in  different  courts, 
(g)  and  though  the  parties  to  the  different  records  are  not  the 
saiTic.(/() 


recovered  by  Clenlow  in  one  of  these  actions  should  not  be  set  off  against  the 
costs  recovered  by  Lowe  in  the  other  action.  Ware,  attorney  for  Lowe, 
shewed  for  cause  that  the  parties  in  the  two  causes  were  different ;  and  that, 
by  this  means,  Clenlow,  who  was  in  good  circumstances,  would  be  discharged, 
and  Ware  would  have  no  remedy  for  his  costs,  Lowe  being  insolvent.  The 
rule  was  discharged  :  (and  it  is  to  be  noted  that  in  this  court  the  attorney's 
lien  is  only  subject  to  the  equitable  claihis  of  the  parties  ;  post,  note  t)  so  that 
upon  that  supposition  this  decision  must  have  been  upon  the  groiuid  either 
that  the  paities  Avere  diiVerent,  or  that  costs  were  never  set  off  against  costs. 
In  H.  T.  17  G.  n.  in  K.  B.  Duthy  v.  Tito  &  al.  Tito  v.  Duthy,  sfrange  1203. 
In  both  causes  the  verdict  was  for  the  defendants  :  and  now  Tito,  one  of  the 
defendants  in  the  first  cause,  moved  that  the  costs  he  was  to  pay  to  Duthy  in 
the  second  cause  might  be  set  agahist  the  costs  Duthy  was  to  pay  in  the  first. 
Sed,  per  curiam,  it  cannot  be  done  :  there  was  forced  to  be  an  act  of  parlia- 
ment in  the  case  of  nmtual  debts  :  besides,  how  can  we  prefer  Tito,  who  is 
but  one  defendant  out  of  five,  when  the  plaintiff  in  that  action  may  pay  the 
costs  to  either  of  the  others  ?  In  23  Geo.  II.  in  C.  B.  IVIordecai  v.  Nuting,  et 
al.  Bull.  Ni.  Pri.  336.  In  an  action  of  trespass  against  four,  three  were  ac- 
quitted, and  motion,  on  their  behalf,  that  their  costs  might  be  deducted  out  of 
what  the  fourth  defendant  was  to  pay,  upon  an  affidavit,  that  the  plaintiff  was 
a  travelling  Jew — denied.  The  same  decision  is  reported  in  Barnes  145. 
saying  that  the  court  declared  the  motion  to  be  unprecedented. 

Since  33  Geo.  II.  all  the  cases,  except  that  of  Powel  v.  Smith,  et  e  contra. 
T.  25  Geo.  II.  Bull.  Ni.  Pri.  336.  uniformly  allow  demands  arising  upon 
opposite  judgments  to  be  set  off  against  each  other.  The  following  arc  the 
cases  :  Wills  v.  Crabb,  E.  24  Geo.  II.  Bull.  Ni.  Pri.  336.  A  plaintiff  being 
nonsuited,  the  defendant  took  out  a  fi.  fa.  and  levied  part  of  the  costs,  and,  at 
the  same  time,  took  out  a  ca.  sa.  for  the  rest,  and  took  the  plaintiff  in  execu- 
tion ;  w  hich  being  irregular,  the  court  set  it  aside  with  costs  :  the  defendant 
moved  that  tiie  proceedings  against  him  on  account  of  these  costs  should  be 
stayed,  upon  his  entering  up  satisfaition  upon  the  judgment  obtained  by  him 
lor  the  sum  at  which  the  costs  for  the  irregularity  were  taxed,  and  upon 
shewing  cause  the  rule  was  absolute.  Powel  v.  Smith,  et  e  contra,  T.  T.  25 
Geo.  II.  Bull.  N.  P.  33G.  In  cross  actions  of  assault,  each  party  being  non- 
suited, S.  had  his  costs  taxed  at  y/.  ICv.  and  P.  his  at  13/.  lOv.  whereupon  he 
moved  lobe  at  lilierty  to  deduct  the  9/.  lO.v.  out  of  the  13/.  lO.s.  paid  by  him 
unto  tiie  sheriffs  :  rule  to  shew  cause,  but  the  defendant  not  consenting,  the 
court  said  tiiey  could  not  do  it.  In  Scoffin  v.  Robinson,  in  trespass,  E.  T. 
26  Geo.  II.  C.  B.  tiled  2  Blackst.  826.  plaintiff,  at  the  last  assizes  for  Kent, 
recovered  a  verdict  against  defendant  ;  and,  at  the  same  assizes,  in  an  eject- 
ment on  the  demise  of  Hobinson  (defendant  in  this  action)  plaintiff  re(0\trcd 
a  verdict.  Kobinson  applied  to  have  the  costs  he  was  entitled  to  diductedoui 
of  the  costs  to  be  allowed  Scoffin.  Rule  for  that  purpose  made  absolute. 
Thrustout,on  demise  of  Biirnes  v.  C rafter,  2  Blackst.  826.  T.  T.  12  Geo  III 


SET-OIF    AT     COMMON     LAW 


Costs  may  be  set-ofF  against  costs  only,  or  against  debt  and 
costs.(i) 


Barnes  the  lessor  of  the  pkiintiff  had  a  judgment  last  Michaelmas  term,  for 
40/.  5*.  against  the  defendant  for  his  debt  and  costs  on  an  action  for  the  use 
and  occupation  of  the  premises,  but  was  nonsuited  in  the  present  cause,  the 
costs  of  vvliicii  arc  taxed  at  12/.  5s.  for  non-payment  of  which,  an  attachment 
is  taken  out  against  the  plaintiff".  The  demands  arising  upon  each  juci.gment 
Avere  set-off' against  each  other.  The  court  said  that  the  \w'mi  had  been  settled 
hy  the  cases  whicJi  had  been  cited  by  the  counsel,  viz.  Terlo  v.  Lowe.  16 
Geo.  II.  1  Barn.  102,  (I  cannocfind  this  case)  Scoffinv.  Robinson,  Roberts  v. 
Biggs,  Roberts  v.  Mackroul,  T.  T.  9  Geo.  III.  This  doctrine  is  now  finally 
settled.     Vide  the  following  notes. 

(/)  Glaister  v.  Hewer,  8  T.  R.  69.  39  Geo.  III.  (Appendix  9)  It  is  stated 
by  the  counsel,  and  acceded  to  by  the  court,  tliat  applications  of  this  nature 
are  to  the  equitable  jurisdiction  of  the  couit  ;  and  that,  in  attending  to  them, 
they  will  be  guided  by  the  rule  adopted  in  a  court  of  equity,  that  he  who  asks 
equity  must  do  equity.  Vide  O'Connor  v.  Murphy^  1  H.  Bl.  «359.  A.  D. 
1791.  (App.  10)  where  the  court  proceeded  solely  on  equitable  principles. 

(5-)  Barker  administratrix  v.  Braham,  2  Blackst.  896.  3  V/ils.  396.  13 
Geo.  III.  (Ap.  8)  The  sum  of  102/.  18.s.  \d.  was  due  from  the  plaintiff"  as 
administratiix  of  her  husband,  on  a  judgment  recovered  in  the  King's  Bench, 
in  Hih  Ter.  1 769.  The  plaintiff  in  the  same  right  as  administratrix,  brought 
this  action  in  the  Common  Pleas  against  the  defendant,  for  a  debt  due  to  the 
intestate,  and  had  a  verdict  for  106/.  96-.  6d.  last  T.  T.  On  motion  that  these 
judgments  might  be  set-off"  against  each  other  :  De  Grey,  C.  J.  No  mischief 
can  follow  from  allowing  it :  no  devastavit  can  happen,  unless  the  plaintiff 
knows  of  any  superior  debt ;  and,  if  slie  know  it,  slie  might  disclose  it,  and 
shew  it  for  cause.  The  same  answer  may  be  given  to  the  strange  supposi- 
tion of  the  debts  being  satisfied  by  executing  a  void  ca.  sa.  for  which  Barker 
had  been  amply  repaid  in  damages.  If  it  had  been  so  determined,  she  might 
have  shewn  that  for  cause  :  I  am  therefore  for  allowing  the  present  motion, 
but  desire  it  may  be  remembered,  that  tl.is  is  the  case  of  one  judgment  against 
another,  both  in  the  same  right :  and  must  be  distinguished  from  setting  off" 
private  debts,  not  in  suit,  and  upon  wiiich  no  judi,ment  has  been  obtained. — 
The  other  judges  of  the  same  opinion. 

Hall  v,  Ody,  2  P.  and  B.  28.  A.  D.  1799.  (Ap.  12)  Cockell  Serj.  this  day 
shewed  cause  against  a  rule  nisi  for  setting-off"  the  costs  of  an  action  of  eject- 
ment recovered  in  the  K.  B.  by  the  defendant  against  the  phintiff",  against 
the  costs  of  an  action  of  trespass  in  this  court,  in  wliich  the  plaintiff  had 
recovered  a  verdict ;  and  insisted  that  in  all  the  cases  where  a  set-off"  of  this 
kind  had  been  allowed,  both  actions  had  been  in  tlie  same  court.  But  the 
court  overruled  the  objection,  saying  that  a  set-off  had  even  been  allowed 
between  costs  in  a  court  of  equity,  and  costs  in  a  court  of  law.  And  Heath, 
J.  observed,  that  he  remembered  a  case  where  an  ejectment  having  been 
brought  in  the  K.  B.  and  afterwards  a  formedon  in  this  court,  proceedings 
were  stayed  in  the  latter  until  the  costs  of  the  former  were  paid. 

{h)  Previous  to  27  Geo.  II.  this  practice  seems  not  to  have  been  permitted. 
In  Duthv  V.  Tito  et  al.  and  Tito   v.  Duthv,  Str.  1203.  H.   T.  17  Geo.  II. 


SET-OFF     At     COMMON    LAW. 


1  he  judgments  may  be  after  verdict,  or  upon  a  nonsuit,  or 
by  default.(/(-) 


(ante,  note  r)  the  defendant  Tito  moved  to  have  the  judgments  set*off  as^ainst 
each  oilier  ;  but  per  curiam,  how  can  we  prefer  Tito,  who  is  but  one  defend- 
ant out  of  five,  when  the  puiintiff  inthat  action  may  pay  costs  to  either  of  the 
others,  and  in  Goodtitle  on  demise  Clenlow  et  Ux.  v.  Lowe  and  Lowe,  and 
Lowe  V.  Lowe  (q.  Clenlow)  in  case  T.  T.  16  Geo.  IL  2  Barnes  130,  (ante, 
note  e)  the  court  of  C.  B.  would  not  permit  the  opposite  judgments  to  be  set- 
off against  each  other,  the  parties  in  the  two  causes  being  different,  and 
Lowe's  injiolvency  defeating  the  attorney's  lien  for  his  costs :  the  modern 
practice  in  the  C.  B.  (post,  note  r)  being  to  allow  the  attorney's  lien  only  to 
extend  to  the  balance  between  the  parties  :  tius  decision,  il  the  practice  were 
then  in  existence,  must  have  been  founded  solely  on  the  ground  that  the 
parties  v/ere  different.  Roberts  v.  Biggs,  27  and  28  Geo.  IL  Barnes  146. 
and  Bull.  Nisi  Pr.  336.  where  Robeits  had  brought  an  action  against  Biggs 
and  others,  and  Biggs  had  brought  a  cross  action  against  Robeits,  the  court 
ofC.  B.  ordered  that  upon  Biggs's  acknowledging  satisfaction  on  the  record, 
in  the  cause  in  which  he  was  plaintiff,  the  pluintifl'  in  the  other  cause  in  which 
he  (Biggs)  and  ot'aers  were  defendants  should  be  restrained  from  taking  out 
execution.  And  in  INIitchcll  v,  Oldfield,  4  Ter.  Rep.  123.  A.  D.  1791. 
(Appendix  13)  The  plaintiff  recovered  a  judgment  against  the  defendant  for 

182/.  lOv.  but  the  defendant  having  also  recovered  in  another  action  against 
this  plaintiff  and  anoti.er,  obtained  a  rule  to  shew  cause  why  the  debt  and 
costs  in  the  latter  should  not  be  set-off  agiunst  the  judgment  in  the  former 
action  ;  suggesting  among  other  reasons,  that  Mitchell  had  absconded.—. 
Bearcroft  (shewing  cause  on  behalf  of  Mitchell's  attorney  in  the  first  action) 
hinted  that  perhaps  the  court  would  not  interfere  at  all  :  inasmuch  as  one 
debt  was  due  to  the  plaintiff  alone,  whereas  the  other  was  the  jouit  debt  of  the 
plaintiff  and  another  to  the  defendant  ;  and  he  observed  that  this  was  not 
such  a  debt  as  could  be  set-off,  under  the  statute.  Lord  Kcnyon,  Ch.  J.  said 
that  this  did  not  depend  on  the  statutes  of  set-off,  but  on  the  general  juris- 
diction of  the  court  over  the  suitors  in  it :  that  it  was  an  equitable  part  of 
iheir  jvuisdiction,  and  had  I)een  frecpiently  exercised.  Rule  absolute,  on  the 
defendant's  allowing  the  lien,  and  on  his  entering  a  remittitur  in  the  cause  iii 
which  he  was  plaintiff.  Vide  Nunez  v.  Modigliani,  1  IL  Bl.  217.  ante, 
note  c. 

(/)  Thrustout  v.  Crafler,  2  Blackst.  826.  12  Geo.  III.  (Appendix  7.)  lo 
a  rule  oljlained  to  shew  cause  why  costs  \n  ejectment  should  not  be  set-off 
against  debt  and  costs  in  an  action  for  use  unci  occupation  :  it  was  slated  by 
coun.sei,  that  there  was  a  dilTerence  in  the  nature  of  exccutii<ns  :  one  being 
for  debt  as  well  as  costs,  foi'  wl.ich  an  action  would  lie  on  the  judgment,  the 
other  for  costs  only,  to  be  recovered  by  contempt.  But  tiie  court  made  the 
rule  absolute. 

(/t)  U/ion  a  nonsuit  Thrustout  v.  Crafter,  2  Blackst.  826.  12  Geo.  III. 
(Appendix  7.)  O'Connor  v.  Murphy,   1  IL  Bl.  656.  A.  D.  179  L  (Ajjpendix 

10.)  by  dffauU  Glaistcr  v.  Hewer,  8  T.  R.  69.  29  Geo.  HI.  (Appendix  9.) 

c 


10  SET-Oir     AT     COMMON     LAW. 


Though  the  judgment  on  one  side  existed  at  the  commence- 
ment of  the  action,  and  might  have  been  pleaded,  it  may  be 
set-off.  (/) 

When  there  arc  opposite  demands  arising  upon  judgments, 
and  the  party  on  one  record  is  indebted  to  the  other  party,  on  a 
consideration  distinct  from  the  judgment,  it  seems  that  the 
court  will  not  permit  such  debtor  to  set-off  his  demand  arising 
upon  the  judgment  without  taking  the  other  debt  into  account ; 
but  the  court  v/ill  not  prevent  judgments  being  set-off  against 
each  Other  when  there  are  many  parties  to  one  of  the  actions, 
because  one  of  these  persons  does  not  take  into  the  account 
a  separate  debt  due  from  him  to  tlie  party  on  the  other  re- 
cord. (;;/) 

In  an  action  against  several  defendants,  of  wliom  some  are 
entitled  to  recei\-e,  and  the  others  are  liable  to  pay  costs  ;  the 
defendants  cannot  balance  their  respective  costs,  and  pay  the 
difference  to  the  plaintiff  upon  the  suspicion  of  hisinsolvcney ;(/?) 
but  the  court  will  permit  the  plaintiff  to  set-off  the  costs  which 


(0  Barker  v.  Brahara,  2  BL  869.  3  Wils.  396.  A.  D.  1746.  (Appendix 
8.)  There  being  clue  to  the  defendant  102/.  18.?.  Id.  from  the  phiintiff,  on  a 
judg-ment  recovered  in  the  K.  B.  in  H.  T.  1769,  the  plaintiff"  brought  an 
action  against  the  defendant  in  the  C.  P.  and  had  a  A^erdict  for  106/.  9.?.  6d. 
last  T.  T.  The  defendant  moved  to  have  these  judgments  set-off,  which 
(without  taking  notice  that  ih:;  judgment  might  have  been  pleaded)  was 
alllowed. 

(?/2)  Glaister  v.  Hewer  and  A.  and  B.  "j   8  Term  Rep.  69.  39  Geo.  III. 
et  I  (App.  9.) 

Hewer  and  A.  and  B.  v.  GUd'ster.  J  Gibbs  and  Park  shev^^ed  cause 
against  a  rule,  obtained  by  Hewer,  and  the  two  other  defendants  A.  and  B. 
for  setting-off  these  judgments  against  each  other  :  they  contended  that  the 
defendants  v/ere  not  entitled  to  set-oft"  their  judgment  against  that  which  the 
plaintiff  recovered  against  them,  because  the  plaintiff"  had  another  demand 
against  Hewer,  saying  that  this  was  an  application  to  the  equitable  jurisdic- 
tion of  the  covu't,  who  would  therefore  be  guided  by  the  rule  that  is  adopted 
in  a  court  of  equity,  that  he  who  asks  equity  must  do  e([uity :  the  court 
thought  that  this  v/ould  be  carrying  the  rule  too  far  ;  for  that  the  effect  of 
discharging  this  rule  would  be  to  subject  the  two  other  defendants  to  the  pay- 
ment of  a  separate  debt  of  Hewer. — Rule  absolute. 

(n)  Mordecai  v.  Nuting  and  al.  B.  N.  P.  326.  23  Geo.  H.  in  C.  B.  In  an 
action  of  trespass  against  four,  three  were  acquitted,  and  motion,  on  their 
behalf,  that  their  costs  might  be  deducted  out  of  what  the  fourth  defendant 
was  to  pay,  upon  an -affidavit  that  the  plaintiff"  Avas  a  travelling  Jew — denied  : 
the  same  decision  is  reported  in  Barnes  143,  saying  that  the  court  declared 
fhe  motion  to  be  unprecedented. 


SET-OFF    AT   COMMON   LAW.  11 


he  is  to  pay,  ajj;-ainst  the  costs  wb.ich  he  is  to  receive,  \a  hen  the 
defendiint,  to  whom  he  is  to  pa}-,  is  the  principal  party  to  the 
suit,  and  has  undertaken  to  pay  costs  and  damag-es.(o) 

One  of  se\eral  defjndants,  against  whom  a  judgment  has 
ha5  been  recovered,  may,  upon  suspicion  of  the  plaintiff's  in- 
solvency, set-off  a  demand  arising  upon  a  separate  judgment, 
which  he  has  obtained  iigainst  tlie  plaintiff,  though  the  plaintiff* 
has  offered  not  to  take  out  execution  against  such  defendant, 
because  he  is  not  the  principal  party  to  the  suit.(/>) 

A  person  who  is  equitably  entitled  to  a  judgment,  may  set- 
off such  judgment,  though  his  name  is  not  upon  the  record.(^) 


(o)  Schoole  V.  Noble  and  two  others,  viz.  S.  &  B.  1  II.  Bl.  23,  (App.  11.) 
The  pIuintift"brought  trespass  at^amst  tlie  defendants  for  breaking  and  enterinp,- 
his  house,  Sec.  Defendants  S.  and  B.  had  suffered  judgment  to  go  by 
default  :  Noble  went  on  to  trial,  and  obtained  a  verdict.  Damages  Avere 
assessed  against  S.  and  B.  at  one  half-penny  each  ;  on  which  Runnington, 
Sergeant,  obtained  a  rule  to  shew  cause  why  the  costs  v/hich  might  be  taxed 
against  S.  and  B.  on  the  judgment  by  default,  and  the  damages  assessed, 
siiould  not  be  deducted  out  of  the  costs  taxed  to  Noble  on  the  postea,  and 
allowed  to  the  plaintiff,  and,  in  the  mean  time,  execution  against  them  stayed. 
This  was  moved  on  an  affidavit,  stating  that  the  defendants  S.  and  B.  had 
acted  under  the  authority  of  Noble,  v/ho  had  undertaken  to  pay  the  damapfc^ 
and  costs. — Rule  absolute. 

(/O  Dennie  v.  Elliot,^Hill  and  others,  2  H.  BI.  587.  A.  D.  1795.  (App.  12.) 
Dennie  obtained  judgment  against  the  present  defendants  ;  Hill  obtained  vi 
rule  to  set  off  a  judgment  v.hich  he  had  obtained  iigainst  Dennie,  on  an  afii- 
davit  that  Dennie  appeared  to  be  insolvent,  that  his  goods  were  all  distrained 
for  rent,  and  that  he  v,as  not  to  be  met  with.  This  was  opposed  on  an  aili- 
davit  of  Dcnnie's,  stating  that  Hill  had  told  him  that  Elliott,  one  of  the  other 
defendants,  vras  to  indemnify  Hill,  as  having  acted  under  his  orders,  and  that 
the  plaijitiff  had  offered  not  to  take  out  e.^fecution  against  Hill.  But  the  rule 
was  made  absolute. 

(y)  O'Connor  v.  Murphy,  1  H.  Bl.  659.  A.  D.  1791.  (App.  10.)  There 
were  two  causes,  (Murphy  v.  O'Loughlin,  and  O'Connor  v.  Murphy)  and 
nonsuits  in  each.  The  first  was  an  action  of  trover  for  a  ship,  wiiich  was 
the  property  of  O'Connor  and  one  O'Sullivan  (who  were  partners  in  trade,) 
and  of  which  O'Loughlin  was  master.  The  second  action  was  by  the  indor- 
see against  the  maker  of  a  promissory  note.  yV  nioiion  to  set-off  arising  upon 
these  judgments,  was  made  on  the  giound  that  the  action  against  O'Lough- 
lin was  defended  at  the  joint  expense  of  O'Connor  and  O'Sullivan,  and  that 
O'Sullivan  was  interested,  together  with  O'Connor,  in  the  promissory  note, 
on  which  the  present  action  was  brought.  Lord  Lou;i,hboiough  eaid  that, 
\ntliout  any  regard  to  O'Sullivan's  interest  in  the  promissory  note,  O'Clonnor 
v.as  erpiitably  entit  led  UUhe  costs  of  thenoJisuil  in  the  action  of  trover  against 
O'Loiighli.M  ;  and  therefore  he  ought  to  be  pcrniitled  to  set  them  off,  as  f?i' 
as  they  would  goagainst  the  costs  in  the  present  action. — Rule  alisoluto 


12  SET-OFl     AT    COMMON^    LAV/ 


It  is  ihe  settled  practice  of  tiic  Court  of  Kiiig'b  Eeiicli,(/') 
that  the  attorney's  lien   upon  the  judgment  of  his   client  shall, 


(r)  Cases  in  K.  B— Muchell  v.  Oldfidd,  4  T.  R.  123.  A.  D.  1791.  (App. 
13.)  Mitchell  had  absconded  ;  upon  an  application  by  Oldfieidto  set-off  oppo- 
site judt^ments,  Bcurcroft  shewed  cause  on  behalf  of  Milchell's  attorney, 
contending,  as  he  was  not  concerned  as  attorney  in  llie  other  action,  he  had  a 
lien  for  his  costs  on  the  judgment  obtained  by  his  client. 

Lord  Kenyon  thought  it  right  tliat  the  attorney  in  this  case  should  be  sat- 
isfied his  costs  before  the  defendant  was  allowed  to  make  the  set-off. 

Duller,  J.  Though  this  court  have  said  that  they  will  not  interfere  on  the 
bchaifofthe  attorney,  and  prevent  t!ie  plaintiff's  settling  his  own  cause  with- 
out fust  paying  the  attorney's  bill  ;  yet,  when  the  adverse  party,  against 
waom  a  judgment  has  been  obt.dned,  applies  to  get^  rid  of  that  judgment, 
the  court  will  take  care  that  the  attorney's  bill  is  satisfied.- 

Rule  absolute,  on  tiie  defendant's  undertaking,  inter  alia,  to  pay  the  allor- 

ncy'sbill. 

Randle  v.  Fuller,  6T.R.  456.  A.D.  1793.  (Appendix  14.)  A  rule  obtain- 
ed by  the  defendant  to  shew  cause  why  a  judgment  obtained  by  ium  against 
the  plaintiff  should  not  be  set-off  against  a  judgment  obtained  by  the  plaintiff 
in  this  action,  was  opposed  liy  the  plaintiff's  attorney,  claiming  a  lien  upon 
the  judgment  obtained  by  his  client  ;  and  stating  tb.at  the  plaintiff  Irad  ab- 
scoiided,  and  that  he  had  no  other  security  for  his  bill  than  the  judgment. 

The  court,  understanding  that,  by  the  practice  in  the  C.  P.  the  attorney's 
lien  only  extended  to  the  defendant's  residue  upon  balancing  the  accounts, 
desired  the  matter  to  stand  over — .md,  after  deli'oeration, 

Lord  Kenyon,  C.J.  said,  "  It  has  been  expressly  determined  in  Mitchell  v. 
Oldfield,  that  the  attorney  had  a  general  lien  on  the  costs  and  damages  re- 
covered, without  any  such  restriction  as  was  now  endeavoured  to  be  put  upon 
it  :  and  that,  upon  the  reason  and  justice  of  the  case,  he  could  find  no  reason 
to  impose  such  a  restriction.  That,  whatever  might  be  the  practice  in  the 
court  of  C.  P.  he  was  glad  to  find  that  his  opinion  was  warr^aited  by  tl^ie  settled 
practice  of  this  court. 

Tae  law  on  this  head  is  conaidered  as  settled  in  Glaister  v.  Hewet,  8  T. 
R.  69.  3  Geo.  HI.  (Appendix  9.) 

Morland  and  Ilarp.mersley  v.  Lashley  ;  Same  v.  Lashley  and  Ux,  B.  R. 
A.  D.  1795.  innotes,  2  H.  Bl.  441.  Both  these  causes  were  tried  atthe  sit- 
tings Trin.  34  Geo.  III.  The  first  was  an  action  upon  the  separate  bond  of 
the  defendant :  the  second  upon  the  joint  bond  of  the  defendant  and  his  wife. 
In  the  first,  the  plaintifi"  obtained  a  verdict,  and  in  the  second  was  nonsuited. 
In  the  same  term  Henderson  on  the  part  of  the  plaintiff  obtained  a  rule  to 
shew  cause,  why  the  costs  of  the  nonsuit  should  not  be  deducted  from  the 
sum  given  by  the  verdict  in  the  first  cause. 

Palmer  shewed  cause  contending  on  the  authority  of  Mitchell  v.  Oldfield, 
4  T.  R.  B.  R.  123.  that  the  attorney  for  the  defendants  had  a  lien  on  the 
judgment  for  his  costs.  In  support  of  the  rule  Henderson  cited  Barker  v. 
Braaam,  3  VVils.  396.  and  attempted  to  distinguish  the  present  case  from 
Mitcneli  V.  Oldfield,  because  there  were  different  attornies  in  the  different. 
causes  in  tuatcase,  but  here  the  attorney  was  the  same  in  both.     But 


SET-OFF     AT     COMMON     LAW. 


upon  his  rippliciitJon,(A-)  be  first  satisfied,  before  the  opposite: 
piirty  is  permitted  to  set-clf  any  judgment  v.hich  he  has  ob- 
tained, \vhether  there  are  the  same  or  different  attornies  in  the 


Lord  Ktiivon  slicI  liiat  circumstance  made  no  difierence  between  the  cases, 
and,  as  toiiie  case  in  ^^'ilson,  it  did  not  there  appear  that  any  application  was 
made  on  the  part  of  the  attorney.  That  an  attorney  hud  a  lien  on  the  judg- 
ment lor  his  costs  Avhich  it  would  be  unjust  in  the  court  to  take  from  luni. 
Tl\e  rule,  th.erefore,  was  made  absolute,  with  a  reservation  of  the  attorney's 
lien.  But  as  his  costs  were  ecjual  to  the  costs  of  the  nonsuit,  the  rule  was 
afterwards  abandon.ed. 

The  followinf^  are  cases  in  C.  P. 

Roberts  v.  Figgs,  28  Geo.  II.  2  Barnes.  Suppl.  12.  cited  bv  counsel 
in  Thrustout  v.  Crafter,  C.  P.  2  Blackst.  826.  T.  T.  12  Geo.  III.'  A  rule 
to  shew  cause  why  1 3  guineas  costs  taxed  against  the  plaintiff  in  a  former 
cause,  should  not  be  set-off  against  16  guineas  costs  recovered  against  the 
defendant  in  this  cause  :  it  was  shewn  for  cause  that  the  plaintiff  \vas  insol- 
vent :  and  that  liis  attorney  had  a  lien  upon  these  costs  for  lusbill :  but  it  was 
held  by  \\'ilmot,  C.  J.  et  cur.  that  the  attorney's  lien  was  only  upon  what 
the  plaintiff  was  entitled  to  have,  viz.  the  difference. 

Thruslout  v.  Crafter,  12  Geo  III.  2  Blackst.  826.     (App.  7.) 

Schoole  v.  Noble  and  others,  1  H.  Bl.  23.  A.  D.  1788.  Application  to 
set-off  judgments. 

The  court  held  that  the  attoniey  can  only  have  such  a  lien  on  the  costs,  as 
is  subject  to  th.e  equitable  claims  of  the  parties  in  the  cause. 

Nunez  v.  Modigliani,  1  H.  Bl.  217.  A.  D.  1789.  (a;itc.  note  c.)  An  ap- 
plication to  set-off  costs, 

Lawrence,  Serjeant,  was  stopped  by  the  court,  wlio  said  that  it  liad  been 
decided  in  the  case  of  Schoole  v.  Noble  and  others,  in  this  court,  ti:at  an 
attoniey  had  only  such  a  lien  on  the  costs,  as  were  subject  to  the  equitable 
claims  of  the  parties  in  the  cause. 

Vaughanv.  Davies,  2.  II.  Bl.  440.  A.  D.  1795.  (App.  11.)  This  was  an 
application  by  the  deferidant  to  set-off  judgments. 

Adair,  Serjeant,  shewed  cause,  on  the  part  of  live  attorney  for  the  plain- 
tiff, on  affidavits,  stating  that  he  had  no  fund  to  resort  to  but  the  sum  reco- 
vered by  the  plaintiff  for  the  payment  of  his  bill,  the  plahitiff  himself  being 
insolvent:  tlie  set-off  therefore  ought  not  to  be  allowed,  till  the  attorney's 
bill  was  satisfied.  He  said  that  the  coiut  would  protect  an  attorney  who  was 
their  ofi'icer,  who  would  otherwise  be  Mithout  remedy  ;  and  that  in  the  court 
of  King's  Bench  the  equitable  right  of  setting-off  the  sum  recovered  in  one 
action  against  that  recovered  in  another,  was  always  suljjei  I  to  the  alloiniy's 
lien  for  his  bill  ;  for  which  he  cited  Mitchell  v.  Oldfield,  4  T.  R.  B.  R.  123. 
and  Morland  V.  Lashley,  B.  R. 'I'rin.  34  Cieo.  III.     Ilwi 

On  this  day,  after  consideration,  the  court  said  that  the  attorney's  lien  did 
not  extend  to  prevent  the  parties  in  the  cause  from  having  the  bmelit  of 
tile  set-off,  wnicii  was  applied  for  in  this  case,  and  therefore  ma(k'  the  rule 
absolute. 

Buller,  J.  mentione<l  that  a  similar  decision  had  taken  place  this  Icfui  in 
the  Court  olCliancery,  in  a  case  of  Burton  y.  LUicrbij^ton. 


14  SET-OFF    AT    COMMON    LAW. 


difterent  cliiiscs.(/')  In  the  Court  of  Common  Pleas  the  attor- 
jiey's  lien  extends  only  to  the  difference  upon  balancing  the 
judgments  ;  but  this  practice  seems  not  te  be  finally  settled. (z^) 


Denic  v.  EUioit,  Hill  ami  others,  2  H.  Bl.  589.  A.  D.  179j.  (App.  12.) 
In  this  case  a  rule  was  t^ranted  to  shew  cause  why  a  juch^ment  obtamed 
by  the  defendant  should  not  be  set-off  against  the  plaintiff's  judgment  in 
this  cause. 

In  opposition  to  the  rule  Le  Blanc,  Serjeant.  The  attorney  for  the  plain- 
tiff made  an  affidavit  that  he  had  no  security  for  his  costs,  which  the  plaintiff 
was  unable  to  pay,  and  Avhich  he  verily  believed  he  should  lose,  if  the  set- 
off vv'ere  allowed,  as  he  had  no  chance  of  recovering  them,  but  out  of  the 
damages  and  costs  to  be  received  under  the  judgment  for  the  plaintiff. 

Le  Blanc  also  relied  on  the  practice  of  the  court  of  King's  Bench,  and 
riled  Mitchell  v.  Oldfield,  4  T.  R.  B.  R.  123.  and  Randle  v.  Fuller,  6  T.  R. 
B.  R.  456. 

In  support  of  the  rule.  Bond,  Serjeant,  insisted  on  the  known  practice  in 
lliis  court,  that  the  attorney's  lien  for  his  costs  was  subject  to  the  equitable 
claims  of  the  parties  in  the  cause,  which,  he  said,  was  settled  in  the  cases  of 
Schoole  V.  Noble,  ante  vol.  i.  23.  Nunez  v.  Modigliani  217.  O'Connor  v. 
Murphy  659.  and  Vaughan  v.  Davies,  vol.  ii.  440. 

The  court  held  the  practice  here  to  be  clearly  established  by  these  cases, 
whatever  might  be  the  rule  in  the  King's  Bench  ;  and  therefore  that  it  was 
not  now  to  be  disputed. — -Rule  absolute. 

Hallv.  Ody,  2  P.  and  B.  28.  A.  D.  1799.  (App.  12.)  A  rule  was  obtain- 
ed by  the  defendant  for  setting-off  judgments. 

Cockell,  Serjeant,  stated,  that  he  oppo-icid  the  rula  on  the  pail  of  tlie 
plaintift''s  attorney,  who  had  not  been  paid  his  costs,  and  represented  that  the 
plaintiff  himself  was  now  in  prison.  He  cited  Mitchell  v.  Oldfield,  4  T.  R. 
123.  to  sliew  that  the  attorney  has  a  lieu  on  the  judgment  for  the  amount  of 
his  costs. 

Shepherd  contra  relied  on  Denie  v.  Elliot :  when  it  v/as  held,  that  whate- 
Ter  might  be  the  rule  in  the  King's  Bench,  yet  according  to  the  practice  of 
this  court,  the  lien  of  the  attorney  was  subject  to  the  equitable  claims  of 
two  parties. 

Lord  Eldon,  C.  .T,  Finding  it  to  be  the  practice  of  this  court,  that  an  at- 
torney shall  not  take  his  costs  out  of  the  furid,  v/hich  by  his  diligence  he  has 
recovered  for  his  client,  where  the  opposite  party  is  entitled  to  a  set-off,  it 
does  not  become  me  to  say  more  than  that  I  find  it  to  be  the  setLied  practice 
with  much  surprise,  since  it  stands  iii  direct  contradiction  to  the  practice  of 
every  other  court  as  well  as  to  the  principles  of  justice.  In  the  Court  of 
Chancery  the  same  parties  are  often  concerned  in  many  suits,  and  I  never 
knew  the  idea  entertained  of  arranging  tlie  funds  till  the  respective  attornies 
were  paid  their  costs.  liov/ever,  as  the  attorney  in  this  case  has  acted  Avith 
a  knowledge  of  the  settled  practice  of  the  court,  he  can  have  no  right  to 
claim  the  advantage  of  a  more  just  principle :  aiid  it  will  only  remain  for  the 
court  to  consider,  whether  the  practice  of  the  Court  of  King's  Bench  should 
not  be  adopted  here  for  the  future. 

Heath,  J .  I  have  no  objection  to  have  the  practice  reconsidered. 


SECTION  11. 

OF  SETOFF  BY  STATUTE. 


Set-off  bij  Statute  relates  \st,  to  Set-off  hi  General;  and,  2cl, 
to  Set-off  in  the  particular  Lases  oj  Bankmpts,  a?id  of  Insol- 
vent Debtors. 


CHAPTER  I. 
OF  SET-OFF  BY  STATUTE  IN  GENERAL. 


W  HEN  there  are  mutual  debts  betAveen  the  phiintiff  and  the 
defendant  at  the  time  of  the  eommeneement  of  the  action  ; 
or  if  either  party  sue  or  be  sued  as  executor  or  administrator, 
where  there  are  mutual  debts  between  the  testator  and  intes- 
tate, and  the  other  party ;  one  debt  may  be  set  against  the  other, 
either  by  beinggiven  in  evidence  upon  the  general  issue,  or 
by  being  pleaded  in  bar  ;  except  where  either  of  the  debts  ac- 
crues by  reason  of  a  penalty  contained  in  a  specialty  ;  when 
the  debt  intended  to  be  set-off  must  he  pleaded  hi  bar,  and  the 
plea  must  state  how  much  is  truly  and  justly  due  on  either  side; 
but,  in  all  cases  where  the  general  issue  only  is  pleaded,  notice 
must  be  given,  at  the  time  of  pleading,  of  the  particular  sum 
or  debt  intended  to  be  set-off,  and  upon  what  account  it  became 
due  :  and,  if  the  plaintiff  recover  in  any  suit  or  action  where  a 
set-off  is  given  in  evidence,  judgment  must  be  entered  for  no 


Rookc,  J.  There  can  I)c  no  objection  to  rcconsiderini;  tlie  pracUce,  but  it 
docs  not  appear  to  me  to  be  unfair  as  it  stands  at  present.  The  attorney  looks 
in  the  first  instance  to  the  personal  security  of  his  client,  and  if  beyond  that 
he  can  get  any  further  security  in  liis  hantls,  it  is  a  nitre  casual  advantage. 
Uule  absolute. 

(*)  Vide  Morland  v.  Lasliley,  note  r. 

(0  ^'ide  note  r  Morlaiid  v.  Lasliley. 

^u)  Vide  note  r. 


« 


16  SET-OFF     BY     STATUTE 


more  than  appears  to  be  clue   to  him   on  the   balance  of  ac- 
counts.(r) 


{v)  2  Geo.  II.  ch.  22.  sect.  13.  And  be  it  further  enacted  by  the  authority 
aforesaid,  That  where  there  are  mutual  debts  between  the  plaintiff"  and    de- 
fendant, or  if  eitl.er  party  sue  or  be  sued  as  executor  or  administrator,  where 
there  am  mutual  debts  between  the  testator  or  intestate,  and  either  party, 
one  debt  may  be  set  against  the  other  ;  and  such  matter  may  be  given  in  evi- 
dence upon  the  general  issue,  or  pleaded  in  bar,  as  the  natui'e  of  the  case 
shall  require,  so  as  at  the  time  of  his  pleading  the  general  issue,  Avhere  any 
svich  debt  of  the  plaintiff,  his  executor  or  intestate  is  intended  to  be  insisted 
on  in  evidence,  notice  shall  be  given  of  the  particular  sum  or  debt  so  intend- 
ed to  be  insisted  on,  and  upon  what  account  it  became  due,  or  otherwise  such 
matter  shall  not  be  allowed  in  evidence  upon  such  general  issue. — 8  Geo.  II. 
ch.  24.   sect.  4.     And  whereas  the  provision  for  setting  mutual  debts  one 
ag:unst  the  other,  is  highly  just  and  reasonable  at  all  times,  be  it  therefore 
enacted  by  the  authority  aforesaid.  That  the  said  clause  in  the  said  first  re- 
vited  act,  2  Geo.  II.  ch.  22.  '  for  setting  mutual  debts  one  against  the  other, 
hhall  be  and  remain  in  full  force  for  ever.'     Sect.  5.  And  be  it  further  enact- 
ed and  declared  by  the  authority  aforesaid.  That  by  virtue  of  the  said  clause 
in  the  said  recited  act  contained,  and  hereby  made  perpetual,  mutual  debts 
may  be  set  against  each  other,  either  by  being  pleaded  in  bar,  or  given  in 
evidence  under  the  general  issue,  in  the  manner  therein  mentioned  notwith- 
standing that  such  debts  are  deemed  in  law  to  be  of  a  different  nature,  unless 
in  cases  where  either  of  the  said  debts  shall  accrue  by  reason  of  a  penalty  con- 
tained in  any  bond  or  specialty  :  and  in  all  cases  where  either  the  debt,  for 
which  the  action  hath  been  or  shall  be  brought  ;  or  the  debt  intended  to  be 
set  against  the  same,  hath  accrued  or  shall  accrue  by  reason  of  any  such  pe- 
nalty, the  debt  intended  to  be  set-off',  shall  be  pleaded  in  bar,  in  which  shall 
be  shewn  how  much  is  truly  and  justly  due  on  either  side  ;  and  in  case  the 
plaintiff'  shall  recover  in  any  such  action  or  suit,  judgment  shall  be  entered 
for  no  more  than  shall  appear  to  be  truly  and  justly  due  to  the  plaintiff",  after 
one  debt  being  set  against  the  other  as  aforesaid. 

O/imions  upon  the  statutes  considered  together — 1.  The  pi'ovision  for  setting 
mutual  debts  one  against  the  other  is  highly  just  and  reasonable  at  all  times. 

S  Geo.   IL  ch.  24.  sect.  4. 2.  At  common  law,  before  these  acts,  if  the 

plaintiff"  v/ere  as  much  or  even  more  indebted  to  the  defendant,  than  the  de- 
fendant was  indebted  to  him,  yet  the  defendant  had  no  method  to  strike  a 
balance  :  he  could  only  go  into  a  court  of  ecjuity,  for  doing  w  hat  is  most 
clearly  just  and  right  to  be  done.  The  statutes  of  set-off'  were  made  to  re- 
medy this  defect.  Lord  Mansfield,  Burr.  1230. — 3.  The  meaning  of  these 
acts  of  parliament  was,  that  in  all  cases  of  mutual  debts,  the  less  sum  sliould 
be  deducted  out  of  the  greater,  if  the  defendant  desire  it.  Burr.  1230. — 4. 
The  statutes  only  say,  that  the  defendant  may  set-off"  the  debt  due  to  ..im 
from  the  plaintiff",  but  do  not  compel  him  to  do  so.  Burr.  823. — 5.  Where 
there  are  mutual  debts  unconnected,  the  law  said  they  should  not  be  set-off", 
but  each  must  sue  :  and  courts  of  equity  followed  the  same  rule,  because  it 
was  the  law  ;  for,  had  they  done  otherwise,  they  would  have  stopped  the 
course  of  law,  in  all  cases  where  there  v/as  a  mutual  demand.     The  natural 


IN     GENERAL.  17 


This  subject  is  divisible  into  four  parts. (Tf-) 

1.  The  requisites  to  enable  a  person.to  give  a  set-off  in  evi- 
dence. 

2.  Of  a  person's  option  to  waive  or  to  avail  himself  of  his 
right  to  set-off. 

3.  Of  the  pleadings  and  of  the  mode  of  setting-off  debts. 

4.  The  judgment. 

SECTION.  I. 

TJic  requisites  to  enable  a  person  to  give  aset-ojf  in  evidence. 
These  requisites  are  tvvo. — 1.  There  must  be  mutual  debts. 
— 2.  The  debts  must  be  due  at  the  commencement  of  the  ac- 
Tion. 


sense  of  mankind  was  first  shocked  at  this,  in  the  case  of  bankinjpts,  and 
it  was  provided  for  by  4  Ann.  ch.  17.  sect.  11.  and  5  Geo.  II.  ch.  30.  s. 
28.— Where  there  was  no  bankruptcy,  the  injustice  of  such  sttting-ofl"  (espe- 
cially after  the  death  of  either  party)  was  so  ijlaring,  that  parliament  inter- 
posed by  2  Geo.  II.  cb..  22.  and  8  Geo.  II.  ch.  24.  But  the  provision  does 
not  yo  to  goods,  or  otlier  specific  things  wrongfully  detained :  and  therefore 
neither  courts  of  law  nor  equity  can  make  the  plaintiff,  who  sues  for  such 
goods,  pay  first  what  is  due  to  the  defendant,  except  so  far  as  the  goods  can 
be  construed  a  pledge  ;  and  then,  the  right  of  the  plaintiff  is  only  to  redeem. 
Lord  "Mansfield,  Burr.  2221.  O/iiriions  upon  the  statutes  considered  relatively 
and  srf)aratelv. —  1.  The  cause  in  8  Geo.  II.  ch.  24.  is  extremely  beneficial 
to  the  subjects.  Lord  Mansfield,  Burr.  823.  2.  The  2  Geo.  II.  ch.  22. 
enacts  generally, '*  tliat  where  there  are  mutual  debts  between  the  paities,  one 
*'  dibt  may  be  set  against  the  other,"  upon  which  act  of  2  Geo.  II.  doubts 
have  arisen  about  the  different  natures  of  debts;  by  the  8  Geo.  II.  ch.  24. 
there  is  a  general  provision  without  exception.  Lord  Mansfield,  Burr.  826. 
3.  The  former  act  is  general,  tiiat  mutual  debts  may  be  set  one  against  the 
other,  upon  which  there  was  a  doubt,  and  a  difference  of  opinion,  between 
this  court  (K.  B.)  and  the  court  of  Common  Pleas,  concerning  setting  off 
debts  of  different  natures:  the  8  Geo.  II.  ch.  24.  allows  notwithstanding  the 
ck-bts  are  deemed  inlaw  to  be  of  a  different  nature.  Burr.  1025.  4.  The 
dav  after  the  last  act  passed,  the  Lord  Hardwicke,  Ch.  J.  delivered  the  opin- 
io.! of  the  court  of  King's  Bench,  that  a  debt  by  simple  contract  niii^ht,  by 
the  former  act,  have  been  set  off  against  a  specialty  debt.  Bull.  Ni. 
Pri.  179. 

(w)  This  is  obvious  from  observing  that  the  following  divisions  of  tlic 
foregoing  section  in  the  text,  correspond  respectively  with  the  four  parts  into 
which  toe  subject  is  divided.  1.  When  there  are  mutual  debts  between 
the  plaintiff  and  tlie  defendant  at  the  time  of  tlic  commencement  of  the  action, 
8cc.  2.  One  debt  ivay  be  set  against  the  otlier.  3.  By  being  given  in  evi- 
dence, 8cc.  4.  And,  ifthe  plaintiff  retvver  in  any  suit  or  action,  &c.  judg- 
ment must,  £^c. 

S 


18.-.  S£T-OFF    BY    STATUTE 


1.  There  must  l^e  mutual  debts,  tliat  is, 

1.  The  demand  of  the  plamtiff  and  the  demand  of  the  defen- 
dant must  be  a  debt,  and 

2.  The  debt  of  each  party  must  be  due  m  his  oum  right, 
except  in  the  case  of  Executor  or  of  Administrator,  where 
the  del)ts  must  be  due  between  the  testator  or  intestate,  and 
the  other  party  in  their  o^^'n  rights  respectively. 

I.  The  demand  of  the  plaintiff  and  of  the  defendant  must 
be  a  debt. 

1.  As  to  the  demand  of  the  plaintiff. 

A  set-off  cannot  be  pleaded  to  any  action  upon  a  tort ;  not 
to  trespass  ;  to  case  ;  to  replevin,  or  to  detinue. (x) 


(x)  Absolom  V.  Knight,  Bull.  Nisi  Pri.  181.  In  replevin  the  avowant 
justified  under  a  distress  for  rent :  the  plaintiff  at  nisi  prius  insisted,  that 
there  was  more  due  to  him  than  the  rent  amounted  to,  and  Denison,  J.  refu- 
sed the  evidence,  and,  upon  motion  for  a  new  trial,  tlie  court  held  that  2 
Geo.  II.  did  not  extend  to  the  case  of  a  distress  ;  for  that  is  not  an  action, 
but  a  remedy  with.out  suit  :  they  likewise  declared  that  it  did  not  extend  to 
detinue,  and  the  like  actions  of  wrong.  Vide  Bai'nes  450.  Laycock  v.  Tufi- 
nell,  E.  T.  27  Geo.  III.  MS.  Replevin  for  taking  plaintiff's  goods. — 
Avowry  for  rent.  Plea  of  set-off.  General  demurrer.  The  avowry  stated 
the  rent  payable  half  yearly,  and  avowed  for  half  a  year's  rent.  The  case 
of  Graham  v.  Fraine,  B.  R.  H.  T.  24  Geo.  III.  was  cited,  where  it  was 
held  a  set-off  could  not  be  pleaded  in  an  action  of  replevin,  it  being  an  action 
for  a  tort  :  and  so  held  by  BuUer.  J.  that  a  set-off  in  this  case  could  not  be 
pleaded  to  an  avowry  for  rent.  Sapsford  v.  Fletcher,  4  T.  R.  511.  H.  T. 
32  Geo.  III.     (Appendix  14.) 

Replevin  for  taking  goods  in  the  plaintiff's  dwelling  house.  Avowry  for 
rent.  Plea  that  the  defendant  was  tenant  to  the  Duke  of  Portland,  and  that 
one  Brookes  was  the  occupier  of  the  premises  ;  that,  upon  Fletcher's  refu- 
-sing  to  pay  the  rent,  the  Duke  distrained  upon  Brookes  for  the  value  :  and 
so  the  plaintiff  said  that  nothing  of  the  said  rent  was  in  arrear  to  the  said 
Fletcher.  General  demurrer.  Chambre,  in  support  of  the  demurrer,  urged 
that  the  plea  i!:i  bar  was  no  answer  to  the  avowry  :  for,  though  it  was  not 
pleaded  in  form  as  a  set-off,  it  was  so  in  effect :  and  it  has  been  held  that 
the  statutes  of  set-off  do  not  extend  to  a  replevin.  (Absolom  v.  Knight, 
Bull.  Nisi  Pri.  181.)  Lord  Kenyon,C.  J.  The  general  principle  that  has 
been  relied  on  in  the  argument,  that  a  set-off  cannot  be  pleaded  to  an  avowry 
for  rent,  is  not  questioned  :  it  is  much  to  be  lamented  that  it  should  have 
been  so  decided :  however,  for  the  sake  of  certainty  m  the  law,  we  must 
submit  to  these  decisions  till  the  legislature  alter  the  law.  Buller,  J.  and 
Grose,  J.  of  the  same  opinion,  that  a  set-off  cannot  be  pleaded  to  an  avow- 
ry for  rent :  but  verdict  for  plaintiff,  the  plea  being  good  on  other 
grovmds. 


IN     CENiKALi  ;tP 


A  set-olf  caiiiiot  be  pleaded  to  debt  on  bond  conditioned  for 
die  performance  of  covenants,  where  damages  are  to  be  assess- 
ed by  a  jmy  :  nor  to  an  action  for  general  damages  in  covenant 
of  assumpsit  :  but  a  sct-oiF  may  be  pleaded  to  an  action  of 
debt,  covenant  or  assumpsit,  for  a  sum  certain. (y) 

In  an  action  of  damages  for  the  breach  of  a  special  agree- 
ment, ihe  defendant  cannot  avail  himself  of  a  set-off  unless 
the  plaintiff  is  obliged  to  have  recourse  to  the  common 
counts.(;r) 


(y)  Hutchinson  v.  Sturges,  WilksRep.  261.  H.  T.  14  Geo.  II.  Bull.  Nisi 
Pri.  179.  (Appendix.)  DLleiidaut  to  the  plaintiff,  one  of  the  bearers  of  the 
virges  of  the  King's  household,  and  an  officer  and  minister  of  the  King's 
court  of  his  palace  at  Westminster  :  the  condition  of  the  bond  was  for  the 
appearance  of  S.  Daniel  before  the  judges  of  the  King's  court  of  his  palace 
at  Westminster  at,  Sec.  to  answer  T.  S.  in  a  plea  of  trespass  on  the  case — 
Plea  of  set-off.  Judgment  for  the  plaintiff,  that  a  set-off'could  not  be  plead- 
ed to  this  action.     Vide  note  (z)  and  (2/)  page  21. 

(z)  Colson  8c  al.  Assignees  of  Hunter,  a  bankrupt,  v,  Wesh,  1  Esp. 
Cases,  Nisi  Pri.  378.  A.  D.  1793.  This  was  an  action  on  the  case.  The 
declaration  stated,  that  Hunter,  the  bankrupt,  on  the  14th  of  May,  1793, 
then  being  the  owner  of  40  barrels  of  pork,  which  were  in  the  possession  of 
one  Atkinson,  a  wharfinger  ;  and  Hunter  being  indebted  to  the  defendant  in 
the  sum  of  80/.  and  to  Atkinson  in  the  sum  of  50/.  it  was  agreed  by  and  be- 
tween Hunter  and  the  defendant,  that  Hunter  should  give  to  the  defendant 
an  order  upon  Atkinson,  to  deliver  the  40  barrels  of  pork  to  the  defendant  at 
and  after  the  price  of  6  5.s.  per  barrel;  and  that  the  defendant  should  pay 
iiimself  40/.  of  his  debt,  the  50/.  to  Atkinson,  and  pay  over  the  remainder  to 
Hunter,  to  wit,  the  sum  of  40/.  ;  and  that  in  consequence  of  this  agree- 
ment, the  pork  was  delivered  to  the  defendant ;  he  paid  tiie  50/.  to  Atkinson ; 
but,  contrary  to  his  agreement,  after  receiving  40/,  himself  on  his  own  ac- 
count, refused  to  pay  over  the  rcnr.iinder  to  Hunter,  or  the  assignees,  since 
his  bankruptcy.  This  action  was  brought  by  the  assignees  for  the  purpose  of 
recovering  that  residue.  The  defendant  pleaded  the  general  issue,  and  gave 
notice  of  set-fjff,  of  a  large  debt  due  from  Hunter  to  him.  The  plaintiff  prov- 
ed the  agreement,  as  laid  in  the  declaration,  and  an  express  promise  by  the 
defendant  to  pay  over  t!ie  remainder,  only  deducting  the  discount ;  and  that 
there  should  no  attachment  issue  on  it,  or  deduction  be  made.  Erskine  for 
the  plaintiff  insisted,  1.  That  this  was  a  description  of  action,  jn  which  a 
set-off  could  not  Ije  allowed  ;  but  2.  That  if  it  was  an  ;iction  in  which  a 
set-off  could  be  allowed,  the  defendant  had  precluded  himself  from  taking  the 
benefit  of  it,  by  his  own  agreements,  he  having  thereljy  waved  every  benefit 
of  tiiat  sort  by  iiromising  to  pay  over  the  residue  of  the  price  of  the  poik, 
after  deducting  llie  sums  of  40/.  and  50/.  without  any  furtiicr  deduction 
whatsoever.  Eord  Kenyon,  said,  he  was  of  opinion  that  evidence  of  set-off 
wxs  inadmissible  ;  that  the  declaration  was  very  ingeniously  drawn,  and  was 
on  the  face  of  it  not  an  action  for  a  debt,  but  for  tlamages  for  breach  of  at\ 


20  SET-OFF    BY    STATUTE 


A  set-ofF  may  be  pleaded  to  an  action  for  the  arrears  of  an 
annuity.  (2a) 

2.  As  to  the  demand  of  the  defendant. 

If  a  debtor  is  discharged  out  of  execution,  thougli  upon 
terms  with  which  he  does  not  afterwards  com  pi}-,  the  debt  is 
extinguished,  and  cannot  be  set-off.  (2/6) 

A  debt  barred  by  the  statute  of  limitations  cannot  be  set- 
off.(2r) 

It  is  said  to  have  been  ruled  at  Nisi  Prius  that,  if  the  de- 


agreement  ;  that  the  statute  of  set-ofFwent  only  to  cases  of  mutual  debts  :  if 
therefore  the  plaintiff  had  been  forced  to  have  had  rccov.rse  to  the  comu^.on 
count  for  money  had  and  received,  in  such  case  the  set-off'  would  be  admis- 
sible ;  but  not  in  the  present  case,  where  the  plaintiff  had  proved  the  special 
count  a  ground  of  action.  The  pUdntiff  recovered.  In  the  next  term,  a  new 
trial  was  moved  for,  but  the  court  refused  a  rule  to  shew  cause.  Mde  Ivcch- 
mere  v.  Hawkins,  and  Atkinson  v.  Elliott,  postea. 

(2a)  Collins V.  Collins,  2  Burr.  820.  A.  D.  1759.  (Appendix.)  Debt  on 
bond :  the  condition  appeared  upon  oyer  to  pay  the  plaintiff  an  annuity  of  10/. 
a  year  during  his  life  :  and  likewise  to  maintain  him  in  meat,  drink,  washing, 
and  lodging  in  the  dwelling-house  at  Arundal-cnd  for  f.nd  during  lis  life. 
As  to  the  payment  of  the  annuity  of  10/.  per  annum  there  was  a  plea  of  set- 
off", viz.  that  only  60/.  is  due  to  the  plaintiff  on  account  of  the  said  annuity  ; 
and  that  the  plaintiff'  owes  him  more  than  60/. ;  and  after  the  most  mature 
deliberation,  the  court  were  unanimously  and  clearly  of  opinion  that  the  plea 
■was  valid. 

{2b)  Jaques  v.  Withy,  1  Term  Rep.  557.  A.  D.  1787.  (Appendix.) 
Assumpsit.  Set-off"  340/.  upon  a  judgment  recovered  in  Trin.  Term  in  the 
22d  year,  8cc.  by  the  defendant  against  the  plaintiff,  which  is  still  in  force  and 
unsatisfied.  The  facts  were  that  the  plaintiff",  being  in  execution  under  this 
judgment,  Avas  liberated  on  consideration  of  his  undertaking,  by  bond  and 
•warrant  of  attorney,  to  satisfy  the  judgment  by  instalments  or  by  an  annuity  ; 
and  the  present  defendant  was  afterwards  obliged  to  deliver  up  this  boud  and 
warrant  to  be  cancelled  by  reason  of  a  niistake,  informality  and  irregularity 
in  the  memorial.  The  court  were  clearly  of  opinion  tluit  the  plea  wa.s  bad. 
Per  Buffer,  J.  The  case  of  Vigo  v.  Abdich  goes  the  whole  length  of  this  ;  for 
it  shows  that  if  a  defendant  has  been  once  discharged  out  (-f  e::ecution  upon 
terms  which  are  not  afterwards  complied  with,  the  plaintiff'  cannot  resort  to 
the  judgment  again,  or  charge  the  defendant's  person  in  execution:  so  here 
if  the  defendant  has  neglected  to  avail  himself  of  the  advantage  of  tlie  secu- 
rity, it  is  his  own  fault,  and  he  must  take  the  consequences.  Judgment  for 
plaintiff". 

(2c)  If  a  debt  barred  by  the  statute  of  limitations  be  pleaded  as  a  set- 
off", the  plaintiff"  may  reply  the  statute  :  if  it  be  given  in  evidence  on  a  notice 
of  set-off,  it  may  be  objected  to  at  the  trial.  Bull.  Nisi  Pri.  180.  The  same 
doctrine  is  allowed  in  Cranch,  Extrin.  v.  Kirkman  and  others,  Peake's  Cases. 
121.  A.  D.    1791.  (Appendix.) 


I N    G  E  N  E  R  A  L .  21 


mand  of  the  pkiiiitifl'  and  the  demand  of  the  defendant  be  both 
upon  bills  of  exchange  for  their  mutual  aeconiniodation ;  and 
these  bills  are  of  the  same  date  and  given  in  the  same  transaction, 
and  of  abo\'e  six  years  standing  ;  and,  if  the  operation  of  the 
statute  against  the  demand  of  the  plaintiff  be  prevented  by  is- 
suing process  within  six  years,  the  defendant's  demand,  though 
no  such  process  has  been  issued,  may  be  set  oft".(2c/) 

If  a  tradesman  make  goods  according  to  order,  but  refuse 
to  deliver  them  till  the  vendor,  who  is  insolvent,  procures  some 
person  to  join  him  in  giN'ing  a  security  for  the  payment,  it 
seems  that  the  price  of  the  goods  is  a  debt,  and  mav  be  set- 
off. (2f) 

Unliquidated  damages  cannot  be  set-off,  but  liquidated  dam- 
ages may  be  set-off. (^T) 


{2d)  Ord.  V.  Ruspini,  2  Esp.  Cases,  369.  T.  T.  37  Geo.  III.  (App.  15.) 
The  plaintifl''s  demand  arose  on  a  bill  of  exchange  due  in  the  year  1784, 
which  he  had  kept  alive  by  suing;  out  process  within  the  6  years — the  set- 
off consisted  of  bills  and  notes  of  the  plaintiff,  of  the  same  date,  which  the 
defendant  had  taken  up  or  paid  on  the  plaintiff's  account:  but  they  had  not 
been  kept  alive  bv  issuing  any  process :  Upon  an  objection  to  their  inadmis- 
sibility, Lord  Kenyon  said,  thtit,  as  the  transactions  between  the  plaintiff  and 
the  defendant  were  ail  of  the  same  date,  and  as  the  bills  seemed  to  have  been 
given  in  the  course  of  these  transactions,  and  for  their  accommodation,  it 
would  be  the  iiighcst  injustice  to  allow  one  to  have  an  operation  by  law  and 
not  the  other,  and  that  he  weuld  therefore  hokl  the  latter  to  be  good  as  well 
as  the  former,  and  suffer  them  to  be  set-ofl';  and  upon  proof  of  their  pay- 
ment, they  were  set-off,  and  the  defendant  had  a  verdict. 

(2t)  Dunmore  v.  Taylors.  Peake's  C'ases,  Nisi  Pri.  4  1  H.  T  31.  Geo.  III. 
Assumpsit  for  goods  sold  and  delivered — Set-ofl"  for  goods  sold  and  delivered, 
and  also  for  goods  bargained  and  sold.  On  the  cross-examination  of  tlie 
plaintiff's  witness,  it  appeared  that  the  defendant  had  made  a  waggon  for  the 
plaintiff,  but  had  refused  to  deliver  it  unless  the  plaintiff  Mould  get  .some 
person  to  join  him  in  giving  a  ^:t;curity  for  the  balance  which  the  delivery  of 
rlie  waggon  would  make  in  his  favour:  the  pkiintiff  was  then  insolvent. — 
It  was  objected  that  this  contract,  being  only  executory,  could  not  be  made 
the  subject  of  a  set-ofl^ — Buller,  J.  thought  it  could  be  set-off  as  ("-(xjds  bar- 
gained and  sold.  When  the  cause  had  proceeded  further,  it  appeared  that  it 
was  afterwards  agreed  tiiat  the  plaintiff  should  not  have  the  waggon,  but  that 
the  defendant  should  keep  it.  Upon  which  the  plaintiff  had  a  verdict.  Note, 
after  the  cause  was  over,  Mr.  J.  Buller  said,  that  he  thought  an  indebitatus 
assumpsit  woukl  lie  in  this  case,  but  that  there  was  some  nicety  in  the  (jues- 
tion. 

(2/)  Nedriff  V.  Hogan.  E.  32  Geo.  II.  Bull.  Nisi  Pri.  180.  To  assumpsit 
for  40/.  lent,  bcr.  the  defendant  pleaded  articles  of  agreement  wiili  nuitual 
covenants  in  a  penalty  of  200/.  for  perlbrmunce,  and  showed  a  breach  wiicrc- 


22  SET-Oil'     BY     STATUTL 


II.  'i'o  constitute  niutuaiity  of  debts  it  is  ako  necessary  t/iai 
the  debt  of  each  party  he  due  hi  his  oivn  1'iglit :  except  in  the 
case  of  I^xecutor  or  Adniuiistrator^  ivJiere  the  debt  must  be  due 
between  the  testator  and  intestate  and  the  other  party  in  their 
OlVji  rights  respectively. 


by  the  penolty  became  due,  and  offered  to  set-oil':   on  demurrer,   the  court 
held  this  plea  not  within  the  statutes  of  set  off,  for  there  may  not  be  5/.  justly 

due  to  tlie  defendant  on  the  balance. Freeman  v.  Hyctt,    1  Black.  Rep. 

3')'i.  M.  3  Geo.  III.  This  action  was  for  money  due  for  a  parcel  of  cloth. 
Dunning  moved  to  stay  the  trial  of  the  cause  in  order  to  send  a  commission 
into  Portugal  to  establish  a  fact  by  way  of  set-off ;  viz.  that  in  a  former  parcel 
of  cloths  st^nt  to  Portugal,  and  bought  of  the  same  plaintiff,  it  appeared  on 
opeiiing  the  bale,  that  they  v/ere  burnt  in  the  pressing,  which  had  greatly 
lowered  their  v.ilue. — Norton,  Solicitor  General,  objected  that  the  set-ofi"  Avas 
not  maintainable — You  might  as  well  set-off  the  damages  which  you  are  en- 
titled to  recover  for  a  battery  :  you  shall  bring  your  special  action  on  the 
case.  And  of  that  opinion  was  the  court,  and  denied  the  motion.  Howlet 
and  others  v.  Strickland,  Cowp.  56.  E.  14  Geo.  III.  (App.  17.)  This  was  an 
action  of  covenant.  The  defendant  pleaded  that  he  had  sustained  greater 
damages  by  reason  of  the  breaches  committed  on  the  part  of  the  plaintiff 
than  the  value  of  tlie  damages  sustained  by  the  plaintiff  on  account  of  the 
breaches  alleged  in  the  declaratioii  :  all  the  breaches  assigned  in  the  plea 
were  for  non-delivery  of  allum  in  due  time.  The  plaintiff  demurred,  and  for 
special  cause  assigned  that  it  was  not  competent  to  the  defendant  to  plead 
the  damages  by  way  of  set-off. — Lord  Mausiield.  I  take  this  plea  to  be  mere- 
ly for  the  purpose  of  delay.  The  act  of  parliament  and  the  reason  of  the  thing 
relate  to  mutual  debts  only.  These  damages  are  no  debts,  and  indebitatus 
assumpsit  could  not  be  brought  for  them.  Mr.  J.  Ashhurst.  Debts  to  be  set- 
off must  be  such  as  an  indebitatus  assumpsit  will  lie  for.  Mr.  J.  Aston.  Clear- 
ly an  unliquidated  demand  or  uncertain  damages  cannot  be  set-off.  Judg- 
ment for  plaintiff.  Wcighall  v.  Waters,  6  Term.  Rep.  488.  A.  D.  1795. 
(App.  18.)  To  an  action  of  covenant  for  half  a  year's  rent,  271.  10s.  due  at 
Christmas  1794,  for  a  house  demised  by  the  plaintiff  to  the  defendant  for  21 
years  from  Christmas  1788,  the  latter  pleaded,  that  by  the  said  indenture 
(on  which  the  action  was  brougi.i)  he,  the  defendant,  covenanted  to  repair  and 
to  surrender  to  the  plaintiff  at  the  end  of  the  term  the  same  premises  well  and 
sufficiently  repaired,  "  casualties  by  fire  and  tempest  excepted  ;"  that  before 
the  24th  of  June,  1794,  a  violent  tempest  arose,  and  threw  down  with  great 
force  and  violence  a  stack  of  chimneys  belonging  to  the  house  on  the  roof  of 
the  house,  Sec.  and  damaged  the  house  so  much  that  it  would  soon  have  become 
uninhabitable  if  he  (the  defendant)  had  not  immediately  repaired  it ;  tha.t  he 
was  obliged  to  layout  in  the  repairs  30/.  which  the  plaintiff  became  liable  to 
repay  to  him ;  that  that  sum  is  still  due  to  the  defendant,  and  exceeds  the 
damage  sustained  by  reason  of  the  breach  of  covenant  assigned  ;  and  that  he 
is  ready  to  set  off  that  30/.  &c.  according  to  the  statute :  to  this  plea  there 
was  a  general  demurrer  assignuig  these  causes  ;  that  it  is  not  alleged  in  the 
plea  tlvat  the  plaiiitiff  had  any  notice  of  the  tempest  or  of  the  damage  thereby 


IN    GENERAL.  23 


Cases  on  this  head  relate  to 
Joint  debtors    and   several  debtors : — principal  and  agent: 
— trustees: — husband  and   wife  : — executors  and  administra- 
tors, ^c. 

AS  TO  JOINT  AND  SEVERAL  DEBTS. 

A  joint  debt  and  a  separate  debt  cannot  be  set-ofF  against 
each  other.  (2^^) 

Separate  debts  between  partners  may  be  set-off  against  each 
other.  (2/i) 


done  to  the  house,  nor  that  lie  was  requested  to  repair  the  same  before  the 
defendant  made  the  repairs  stated  in  the  plea,  Sec.  The  court  said  that  the 
plea  could  not  possibly  be  supported,  and  that  it  did  not  admit  of  any  argu- 
ment. Lord  Kenyon,  Ch.  J.  The  objection  to  the  plea  is,  that  it  does  not  set- 
off any  certain  debt,  but  uncertain  damages.  I  do  not  indeed  see  by  what 
covenant  the  landlord  is  boinid  to  repair  damages  occasioned  by  fire  or 
tempest  ;  the  exception  was  introduced  into  the  lessee's  covenant  for  his  be- 
nefit, and  to  exempt  him  from  particular  repairs.  But  if  the  defendant  can 
maintain  any  action  against  the  plaintiff",  (his  landlord)  the  sum  to  be  recovered 
is  uncertaui  ;  it  must  be  assessed  by  a  jury  :  and  there  is  no  pretence  to  say 
that  those  uncertain  damages  may  be  set-off  to  the  present  action.  If  the 
defendant  has  fairly  laid  out  money  in  repairing  what  he  was  not  bound  to 
repair,  perhaps  a  court  of  equity  will  give  him  relief.  Vide  note  (2f) 

Fletcher  v.  Dyche,  2  Term  Kep.  32.  A.  D.  1787.  (App.  21.)  Assumpsit— 
Plea  of  set-off — that  the  plaintiff"  was  bound  to  the  defendant  in  the  sum  of 
236/.  on  a  condition  Avhich  stated  that  the  defendant  had  contracted  with  a 
Committee  for  repairing  the  Parish  Church  of  St.  Mary  le  Bow,  to  repair 
the  same  :  and  that  the  phxintiff  had  contracted  with  the  defendant  to  per- 
form the  smith's  and  iromnonger's  work  within  a  certain  time,  or  to  forfeit 
10/.  a-week  for  every  week  after  the  expiration  of  the  time  till  the  completion 
of  the  work  ;  that  such  smith's  and  ironmonger's  work  was  not  completed 
within  the  limited  time,  but  continued  unfinished  for  4  weeks  after  its  expi- 
ration :  by  which  40/.  became  due  to  the  plaintiff',  which  he  offered  to  set- 
off— The  court  were  clearly  of  opinion  that  the  40/.  was  in  the  nature  of 
liquidated  damages,  and  that  it  might  be  set-off. 

(2(,'-)  i'his  is  evident,  and  may  be  collected  from  all  the  decisions 
on  set-off  in  the  case  of  joint  debts  and  several  debts.  V^ide  the  four  follow- 
ing notes. 

(2/0  Smith  v.  De  Silva.  A.  D.  1776.  Cowp.  469.  D.  Lord  Mansfield.— 
The  consequence  on  a  bankruptcy  between  partners  is,  that  they  are  enti- 
tled, as  against  each  other,  to  the  balance  of  accounts  :  and  so  it  was 
settled  in  the  case  of  Skipp  v.  Ilarwood  (I  Vcz.  239.)  before  Lord  Hard- 
wicke  in  Chancery. 

Smith  V.  Barrow,  2  Term.  R.  476.  A.  D.  i78H.  The  plaintiff  and  Robert 
Smith  his  father  had  been  in  partnership  together,  during  which  tunc-  ont- 
Keate  became  indelHed  to  them  in  5ol/.  Rcjberl  Smith  died,  kaviiigthe 
j)luinliff  his  sole  executor.     After   the  death   of  his  father  the   plaiiuifl"  took 


24  SET-OrF   BY   STATUTE 


A  debt  on  a  partnership  account  becomes,  upon  the  death 
ol'  all  but  one  of  the  partners,  a  debt  to  the  survivor  in  his  own 


the  defendant  into  partnership,  and  Kcate  became  indebted  to  those  two  in 
the  further  sum  of  30/.  ;  he  afterwards  became  involved,  and  his  eflects  were 
transferred  to  certain  trustees  for  the  benefit  of  his  creditors.     Two  payments 
were  made  in  the  course  cf  distribution  at  diiferent  times.     The  first  wlich 
was  made  to  these  parties  (the  plainliff  and  the  defendant)  was  divided  be- 
tween them  according-  to  their  several  proportions  ;  that   is,  the  pi'oportion 
of  the  former  debt  of  531/.  to  the  plaintiff's   separate  nse,  and  the   prc}.cr- 
tion   of  the  30/.   in  moieties  between  them.     After  tljs  the  trustees  trans- 
mitted a  bill  of  exchange  to  the  plaintiff  and  defendant  in  their  joint  names, 
and  the  defendant  alone  received  the  money  undei"  the  title  of  Smith  and 
Banovv.     The  plaintiff's  proportion  of  this  second  di\idcnd,  so  far  as  related 
to  his  original  debt,  was  79/.  14.9.  6f/.  for  which  this  action  for  money  had 
and  received  was  brought.     A  rule  was  obt.dned  to  show  cause  why  the  ver- 
dict which  had  been  given  for  the  plaintiff  should  not  be  set  aside,  and  a  non- 
suit entered,  on  two  grounds  ;  first,  that  the  action  ought  to  have  been  brought 
by  the  plaintiff  as  executor,  or  surviving  partner  :  2dly,  that  the  remittance 
being  made  to  Sm.itli  and  Barrow,  it  appears  to  have  been  received  on  a  part- 
nership transaction,    and   one   partner  cannot  maintain  this  action  against 
anotlier,  because  a  receipt  by  one  is  a  receipt  by  both.     Buller,  J.  I  am  of 
opinion  not  only  that  the  action  is   properly  brought,  but  that  it  could  not 
have  been  brought  in  any  other  form.     In  what  character  was  the  money 
received  by  the  defendant  ?  The  form.er  dividend  was  received  and  divided 
according  to  the  proportions  of  the  respective  debts  of  the  plaintiff  and  de- 
fendant as    partners :  then  on   the  receipt  of  the  second  dividend  by   the 
defendant,  it  should  have  been  divided  into  two  parts  bearing  the  same  pro- 
portion to  each  other,  as  the  separate  demand  of  the   plaintiff  on   Keate's 
estate,  and  the  johit  demand  of  the  plaintiff  and  defendant.     The  plaintiff 
would  have  been  solely  entitled  to  the  first,  and  must  have  shared  the  other 
part  with  the  defendant  as  due  to  the  partnership  account.     So  that  the  first 
part  of  the  sum  was  money  specifically  received  by  the  defendant  to  the  plain- 
tiff's use.     And  if  the  action  had  been  brought  by  the  plaintiff  as  surviving 
partner,  it  w'ouid  have  been  necessary  for  him  to  have  shown  that  he  and  the 
deceased  partner  had  a  cause  of  action  against  this  defendant ;  but  they  never 
had  any  such  cause  of  action  ;  and  it  is  immaterial  to  look  back  to  see  how 
third  persons  were  concerned,  if  as  between  the  plaintift  and  defendant  the 
latter  has  received  a  sum  of  money  for  the  use  of  the  former.     Then  it  has 
been  said,  that  there  could  not  be  a  set-off  in  this  case  ;  but  I  am  of  a  different 
opinion :  for  this  is  an  action  for  money  had   and  received,  in  which  the 
plaintiffs  can  only  recover  what  is  in  justice  due  to  them.     Therefore  suppo- 
sing any  debts  were  due  from  the  plaintiffs  to   the  defendant,  it  was  for  the 
advantage  of  the  latter  to  bring  the  action  in  this  form  : — With  regard  to  the 
sum  of  30/.  due  to  this  partnership,  I  agree  that  this  action  cannot  be  main- 
tained.    One  partner  cannot  recover  a  snm  of  money  received  by  the  other 
unless  on  a  balance  struck  that  sum  is  found  due  to  him  alone.     But  this 
objection  does  not  apply  to  the  larger  sum  in  this  case,  v/hich  is  tlie  one  in 
dispute.     Rule  discharged. 


ring  to  him  from  the  bankrupt  in  bar  of  tlie  action  brought  by  the  assignees 
r  a  third  of  the  profits  of  the  sale."— And  the  fourt  was   clearly  of  opinion 


GENERAL.  25 


Tight,   and  liny  be   set-ofFag-ainst  his  separate  debt.   (2/) 
A  dci:)t  oil  a  jf>int  and  scAcral  bond  may  be  set-oirto  an  action 

brought  l)y  only  one  oi'the  obligors.  (2a-) 

A  debt  on  a  bond  purporting  to  be  a  joint  and  several  bond, 

but  execitted  only  by  one  of  the  obligors,  may  be  set-ofF  to  an 

action  eomnicncedby  the  obligor  who  has  executed  it.  (2/-) 


French,  Assignee,  v.  Fenn,  T.  T.  1783.  Cooke, Bank.  Laws  (App.  19.) 
Action  for  money  had  and  received,  (ieneral  issiu*  and  set-ofF.  Verdict  for 
plaintiffs  on  a  case.  "  On  the  2 1th  of  January,  1778,  Cox,  Holford  and 
Fenn  agreed  to  purchase  a  row  of  pearls  for  an  adventure  in  trade,  and  that 
Fenn  should  advance  the  money  :  the  profits  and  loss  to  be  equally  divided 
In  thirds  :  and  Cox  and  Holford  were  to  pay  Fenn  interest,  till  the  pearls  were 
sold,  for  the  money  advanced  by  him  on  their  account.  In  November  1778, 
Cox  became  a  bankrupt :  after  which  the  defenrlant  sent  the  row  of  pearls  to 
China,  where  it  was  sold  for  60U0/.  and,  the  net  produce  thereon  being 
5000.'.  was  remitted  to  the  defendant."  The  question  for  the  consideration  of 
the  court  Avas,  "  Vv'Iietlier  the  defendant  was  entitled  to  set-off  the  sums 
owi 
for 
that  the  set-off  Avas  allov*able. 

C2''J  Slipper,  assignee  of  Lans,  v.  Stidstone.  1  Esp.  Cases,  N.  P.  47.  A. 
D.  1793.5  Term  Rep.  493.  (App.  20.)  This  was  an  action  of  assumpsit  for 
goods  sold  and  delivered.  Plea  of  the  general  issue,  with  notice  of  set-off. 
The  set-off  was,  a  debt  due  by  the  bankrupt  to  the  defendant  and  one  Abbot, 
Avho  had  been  in  partnership  with  him  ;  but  Abbot  the  partner  was  dead  be- 
fore the  bringing  of  the  present  action.  Lord  Kenyon  allowed  the  set-off.  In 
the  following  term,  Law  obtained  a  rule  to  shew  cause  why  there  should  not 
be  a  new  trial,  on  the  supposed  iiiisdirection  of  the  judge  ;  but  he  afterwards 
abandoned  t!ic  rule,  it  being  understood  that  the  Court  of  K.  B.  concurred 
in  opinion  v/ith  the  Chief  Justice  ;  and  he,  on  being  asked,  admitted  the 
point  not  to  be  maintainable. 

French  v.  Andrade,  GT.  R.  582.  y\.  D.  1796.  (App.  21.)  This  was  an 
action  upon  promises  :  to  Avhich  the  defendant  pleaded  that  the  plaintifi"  and 
one  John  Newton,  who  died  before  the  conunenccment  of  the  action,  were 
indebted  to  the  defendant  in  divers  sums  of  money,  ccc.  for  work  and  labour, 
money  paid,  8cc.  that  those  sums  renrained  unpaid  at  the  death  of  John 
Newton,  ancl  at  the  time  of  commencing  this  action  were  and  still  are  due 
from  the  plaintiff  to  the  defendant,  and  that  they  exceed  the  sum  due  from 
the  defendant  to  the  plaintiff,  against  which  simi  the  defendant  is  willing  to 
set-<jff.  To  this  plea  there  was  a  general  demuri-er.  Per  curiam.  It  is  per- 
fectly clear  that  the  debt  due  fr(»m  the  plaintiff  as  surviving  partner  may  I)e 
set-off  against  the  demand  he  has  in  his  own  right  on  the  defendant.  Judg- 
ment for  defendant. 

(^2X-J  Fletciier  V.  Dyke.  2  T.  R.  32.  .\.  D.  1787.  (Apj).  21.)  Assump- 
sit. Set-offofu  joint  and  several  bond  which  was,  in  fact,  executed  only  \)y 
the  plaintiff,  (ieneral  denmrrer.  Per  Ashhurst,  J-  The parlies  have  cnler- 
i;d  into    a   joint   and   several  bond  ;  it  i»e'-omes  llu'.  scpsiratc  dibi   of  both, 

1^ 


20  SET-OFT   JJY   STATUTE 


If  a  firm  be  carried  on  in  the  name  of  only  one  person,  a  se- 
parate debt  from  that  person  may  be  set-oft"  either  to  an  action 
commenced  in  his  own  right,  or  to  an  action  commenced  by 
the  partners.  (2/) 

If  a  person  give  a  note  to  his  bankers  on  account  of  a  debt 
dne  to  them,  and  the  bankers  indorse  the  note  to  another fnm 
consisting  of  some  of  the  partners  to  the  banking  house  :  the 
maker  of  the  note  may  set-off  any  debt  due  to  him  from  his 
bankers  to  an  action  commenced  against  him  en  the  note,  by 
the  firm  who  hold  it.  (2m) 


and  therefore  may  be  set-off  against  either  : — It  is  sufficient  to  say  that  there 
is  a  separate  as  well  as  a  joint  debt.  Buller,  J.  The  plaintiff's  coun- 
sel then  objected  to  this  set-offj  because  there  was  no  mutuality  :  but  that 
depends  on  the  cjuestion  whether  the  debt  is  due  from  the  plaintiff  and  ano- 
ther person,  or  from  the  plaintiff  alone.  If  the  former,  the  debt  cannot  be 
set-off:  but  it  appears  that  the  bond  was  executed  by  the  plaintiff  alone.  No 
debt  can  arise  upon  the  bond  from  the  other  party  who  did  not  execute.  The 
plaintiff  therefore  alone  can  be  sued  upon  the  bond  ;  so  that  there  is  mutual- 
ity. Grose,  J.  of  the  same  opinion. 

f2Lj  Stacey,  Ross,  and  others  v.  Decy.  2  Esp.  Cas.  269.  M.  T.  1789. 
7  T.  R.  359. (App.  30.)  Assumpsit  for  goods  sold.  Set-off.  The  plaintiffs 
were  partners  :  Ross's  was  the  only  name  that  appeared.  In  an  action  by  the 
partners,  the  defendant  offered  to  set-off  a  debt  due  to  him  from  loss.  Lord 
Keny on  was  of  opinion  that  the  set-off  was  good,  that  the  plaintiffs  had  sub- 
jected themselves  to  it  by  holding  out  false  colours  to  the  world,  by  permit- 
ting Ross  to  appear  as  the  sole  owner :  that  it  was  possible  the  defendant  would 
not  have  trusted  Ross  only,  if  he'  had  not  considered  the  debt  due  to  him- 
self as  a  security  against  the  counter  demand.  The  other  part  of  the  propo- 
sition, viz.  that  to  a  debt  in  hisovni  right  there  may  be  a  set  off,  is  indisputable. 

C2»iJ  Fuller  v.  Roe  and  others,  M.  T.  34  Geo.  III.  Peake  197.  (App.  24.) 
Caldwell,  Smith,  Forbes,  and  Gregory,  were  partners  in  L-iverpool. 
Caldwell,  Smith,  Roe,  and  Co.  v.ere  partners. 
Forbes  and  Gregory  wei-e  partners  in  London. 

Caldwell,  Smith,  Roe  and  Co.  kept  a  banking  account  widi  Caldwell, 
Smith,  Forbes  and  Gregory  at  Liverpool :  and  being  indebted  to  the  firm  in 
Liverpool,  Caldwell,  Smith,  Roe  and  Co.  gave  a  note  for  the  debt ;  which 
note  the  Liverpool  firm  indorsed  to  Forbes  and  Gregory  in  London  for  a 
sum  due  to  that  house. 

In  this  action  by  the  assignees  of  Forbes  and  Gregory  against  Caldwell 
Smith,  Roe,  and  Co.  upon  this  note,  the  defendant  insisted  upon  a  right 
to  set-off  various  sums  due  from  Caldwell,  Smith,  Forbes,  and  Gregory  in 
Liverpool. 

Lord  Kenyon.  This  note  was  given  to  Caldwell  and  Co.  as  a  banking- 
house,  and  constitutes  an  article  in  the  accounts  betvveen  the  defendants  and 
them.  They  cannot,  as  between  themselves,  raise  a  distinct  account, 
though  they  might  indorse  tp  a  tlard  persQn,  The  affairs  of  tlie  company  i«re. 


IN    GENERAL.  27 


j^ls  to  Trustees. 

A  debt  from  the  cestuy  que  trust  laiiy  be  set  off-to  an  action 
eommenced  by  the  trustee  in  right  of  the  trust.  {2n) 

The  director  or  trustees  of  any  company  cannot  set-off  a 
debt  to  them  as  indi\'iduals  against  a  demand  upon  them  in 
their  corporate  capacity  for  stock.   (2o) 


in  presumption  of  lav,',  Imoan  to  all  the  partners,  and  all  are  equally  liable^ 
The  defendants  send  this  bill  to  Caldwell  and  Co.  to  cancel  part  of  the  debt 
due  to  them.  Can  they,  by  any  act  between  themselves,  divert  this  money 
to  another  purpose,  and  leave  the  whole  of  the  defendant's  debt  outstanding  ? 

The  plaintiffs  had    a  verdict  for  the  balance.     A  motion  was  made  for  a 
new  trial,  but  the  court  refused  to  grant  a  rule  to  shew  cause. 

(2/2)  Winch  V.  Keeley,  I  Term  Rep.  621.  A.  D.  1787.  Lawrence,  in 
arguing,  said:  In  the  case  of  Bottomky  v.  Brook,  (M.  22  Geo.  III.  C.  B.) 
which  was  debt  on  bond,  the  defendant  pleaded  that  the  bond  was  given  for 
securing  100/.  lent  to  the  defendant  by  one  E.  Chancellor,  and  was  given  by 
her  direction  to  the  plaintiff,  in  trust  for  her  ;  and  that  E.  Chancellor,  before 
the  action  brought,  was  indebted  to  the  defendant  in  more  money  tlian  the 
amount  of  the  bond :  to  this  there  was  a  demurrer,  which  was  withdrawn  by 
the  advice  of  the  court.  The  authority  of  this  case  was  afterwards  recogni- 
zed in  that  of  Rudge  v.  Birch  (M.  25'Glo.  III.  B.  R.)  in  this  court,  where, 
to  debt  on  bond,  the  defendant  pleaded  that  the  bond  was  given  to  tue  plain- 
tiff in  trust  for  A,  for  a  debt  due  from  the  defendant  to  A  ;  and  that  A,  at 
the  time  of  exhibiting  the  plaintiff's  bill,  was  indebted  to  the  defendant  in 
more  money.  The  plaintiff  denmrred,  and  the  court,  on  the  authority  of 
the  case  of  Bottomley  v.  Brook,  held  this  to  be  a  good  plea.  It  has  likewise 
been  smce  i-ecognized  in  Webster  v.  Scales  (M.  T.  25  Geo.  111.  B.  R.)  Ash- 
hurst,  J.  The  cases  which  have  been  cited  by  the  plaintiff's  counsel  go  a 
great  way  in  determining  this  question.  It  is  true  that  formerly  the  courts  of 
law  did  not  take  notice  of  any  equity  or  trust :  but  of  late  years,  as  it  nas 
been  found  productive  of  great  expense  to  send  the  parlies  to  the  otiier  side 
of  the  hall,  wherever  this  court  have  seen  that  the  justice  of  the  case  nas 
been  clearly  with  the  plaintiff,  they  have  not  turned  him  round  upon  this  ob- 
jecdon.  Then,  if  this  court  will  take  notice  of  a  trust,  why  should  they  not 
of  an  equity  ?  It  is  certainly  true  that  a  chose  in  action  cannot  strictly  be 
assigned  :  but  tliis  court  will  take  notice  of  atiust,  and  consider  who  is  ben- 
eficially interested,  as  in  Bottomley  v.  Brook,  where  the  court  suffered  the 
defendant  to  set-off  a  debt  due  from  Mrs.  Chancellor  in  the  same  manner 
as  if  the  action  had  been  brought  by  her. 

(20)  (iibson  v.  Hudson's  Bay  Company,  1  Str.  639.  M.  T.  12  Geo.  1 11. 
The  plaintiff,  as  assignee  of  the  effects  of  Evans  a  bankrupt,  brings  his  bill 
against  the  Company  to  oblige  them  to  sufler  him  to  transfer  stock.  The 
Company  insist,  that  Evans  was  their  banker,  and  greatly  indebted  to  them; 
and  that,  upon  the  clause  in  the  bankrupt  act,  which  directs  the  coniniis- 
sioners  to  slate  the  account  between  mutual  dealers,  they  shall  be  allowed  to 
hold  the  stock,  and  account  only  for  the  balance,  if  any  shall  ai)piar  against 
them,  I'U'X  decreed   accordingly.     But,  ijJ  Meliorucclii   v.  Extliaiigc  Assu- 


/ 


28  SET-OFF     BY    STATUTE 


If  there  is  an  express  bye-law  to  subject  the  slock  of  caclf 
member  to  a  satisfaction  of  the  debt  whicii  he  owes  to  the  com- 
pany, such  bye-law  is  reasonable^  and  the  debts  mav  be  set- 
off: "(2;^) 

A  debt  from  the  sherifl' cannot  be  set-off  to  an  action  com- 
menced by  him  on  a  bail  bond  :  but,  if  the  bond  be  assigned 
and  an  action  comm.enced  upon  it  by  the  assignee,  a  debt  from 
the  assignee  may  be  set-ofl".   [2q) 


ranee,  1  Eq.  Abr.  9.  (App.  28)  it  was  held  that  the  case  then  before  the 
touit  diftered  from  that  of  the  Hudson's  Bay  Company,  because  in  that 
C4ise  there  was  an  express  bye-law  to  subject  the  stock  of  each  member  to 
satisfy  the  debts  he  siiould  owe  to  the  Company  ;  which  case  (App.  28.)  was 
as  follows.  The  plaintiffs  were  assignees,  and  brought  their  bill  to  compel 
the  defendants  to  assign  some  stock  to  which  the  bankrupt  A\as  entitled. — 
The  defendants  insisted  that  the  bankrup't  was  one  of  the  directors  of  their 
Company,  and  that,  after  iiis  purchase  of  the  stock,  the  Company  lent  him 
a  sum  exceedhig  the  value  of  t!;e  stock,  which  they  insisted  they  had  a  right 
to  set-oiF.  But  the  court  would  not  allow  the  set-off;  the  claim  cf  stock  be- 
ing against  the  trustees  in  their  corporate  capacity  ;  and  the  loan  to  the 
bankrupt  by  the  trustees  being  a  loan  by  them  as  private  persons. 

(2//)  I  insert  this  in  consequence  of  the  explanation  of  Gibson  v.  Hudson's 
Bay  Company,  in  IMeliorucchi  v.  Royal  Exchange,  in  the  last  note  ;  though 
I  am  aware  that  there  is  scarcely  any  necessity  for  making  it  a  separate 
article. — Because  it  seems  that,  1st,  a  debt  to  the  ivhole  comjtany  may  be  set- 
off agciinst  a  demand  for  stock ;  and,  2dly,  a  debt  to  the  trustees,  or  to  any 
indi\  iduals,  on  condition  that  the  stock  shall  be  liable  to  tlie  payment  of  that 
debt,  (which  condition  will  be  manifested  by  the  bye-law,)  may  clearly  be 
opposed  to  each  other,  the  accounts  being  connected  by  the  nature  of  the  con- 
tract.    Vide  Introductory  Chapter,  page  i. 

(2r/)  Hutchinson  v.  Sturges,  Willes'  Rep.  261.  T.  14  Geo.  H.  C.  B.  in 
fiote  (App.  40.)  Lofting  v.  Stevens,  M.  1753.  Bull.  N.  P.  179.  In  debt  upon 
bond  the  defendant  pleaded  a  greater  debt  in  bar,  upon  which  the  plaintiff 
l-u'dved  to  have  the  condition  of  the  bond  inrolled  which  was  to  appear  at 
'Vvestminster,  and  demurred  :  and  it  was  holden  that  this  bond  was  not  with- 
in the  8  Geo.  II.  for  that  statute  relates  only  to  bonds  conditioned  to  pay 
money,  and  not  to  bail  bonds;  and  it  was  not  Avithin  the  statute  2  Geo.  II. 
because  the  plaintiff  did  not  bring  the  action  in  his  own  right,  but  as  trustee 
for  another ;  (for  he  was  an  officer  in  tlie  palace  court)  but  if  it  had  been 
given  to  the  sheriff,  and  by  him  assigned  to  the  other  i>arty,  it  might  be 
otherwise,  and  then  the  i[>enalty  vvould  have  been  considered  as  the  debt, 
because  it  would  have  depended  upon  the  2  Geo.  II.  The  distinctions  be- 
tween the  two  statutes,  as  stated  in  the  foregoing  reports,  may  possibly 
contuse  and  mislead :  neither  of  the  stat^^es  relate  to  any  bonds,  except  bonds 
conditioned  for  the  payment  of  money,  and  both  statutes  require  that  the 
action  should  be  brought  in  the  right  of  the  plaintiff,  and  not  in  the  right  of 
another 


IN    GENERAL.  29 


As  to  principal  agent. 

A  debt  arising  upon  the  contract  of  an  agent  who  deals  as 
principal,  may  be  set-off"  against  any  demand  between  the  a- 
gent  and  die  debtor.  (27*) 

The  debts  bet\veen  the  agent  and  debtor  may  respectively 
be  set-oft' against  each  other  :  and  the  debtor  may  set  oft' a  debt 
to  him  from  the  agent  to  a  demand  by  the  principal.  (2/-) 


[2?-]  The  cases  on  lliis  subject  of  contracts  by  factors  are  divisible  into 
three  classes.  1st.  IVhere  the  agent  actually  receives  payment.  2dly.  Where 
the  debtor  of  the  agent  insists  ujiona  right  to  set-off  a  debt  due  to  him  from  the 
agent,  which  is  either  to  an  action  by  the  Jirincilial  or  to  an  action  by  the  agent, 
3dly.    Where  the  agent  insists  iijion  a  right  to  sct-rff. 

1st.    Where  thefactor  actually  receives  payment. 

Scrimshire  v.  Alderton,  2  Str,  1183.  H.  T.  IG  Geo.  II.  The  plaintiff, 
who  vas  a  farmer,  sent  oats  to  his  factor  in  London.  The  custom  of  the 
trade  appeared  to  be,  that,  formerly,  factors  had  Ad.  per  quarter  for  sel- 
ling them,  ■  and  gave  immediate  notice  to  the  farmer  of  the  name  of  the 
buyer  and  the  price  :  but,  this  being  inconvenient  to  farmers  at  a  distance, 
it  had  for  many  years  past  been  customary  for  the  farmer  to  allow  2d.  per 
quarter  more,  upon  the  factors'  taking  the  risk  of  the  debts  :  since  which 
they  had  ceased  to  inform  the  farmers  of  the  buyers.  The  goods  in  the 
present  case  were  sold :  but,  the  .^actor  failing,  the  pkuntiff  before  actual 
payment  gave  notice  to  the  defendant  (the  buyer)  not  to  pay  the  factor,  which 
Ik;  did  notwithstanding:  and  thereupon  this  action  was  brought.  The  C.  J. 
Lee  was  of  opinion  that  this  new  method  had  not  deprived  tlie  farmer  of  his 
remedy  against  the  buyer,  provided  there  was  no  payment  to  the  factor. — 
And  the  only  reason  of  advancing  2d.  per  quarter  was,  to  have  both  at  stake  : 
and  here  being  notice  before  actual  payment,  there  could  be  no  harm  done. 
And  therefore  he  directed  the  jiuy  in  favour  of  the  plaintiff.  They  went 
out  and  found  for  the  defendant.  They  were  sent  a  second  and  third  time 
to  reconsider  it,  and  still  adhered  to  their  verdict:  and  being  asked,  man  by 
man,  they  separately  declared  they  found  for  defendant.  Upon  this  a  ne>v 
trial  was  moved  for  :  and,  no  lause  being  shewn,  was  accordingly  granted  ; 
and  at  the  sittings  after  term  it  came  on  again  before  a  special  jury  :  when 
the  C,  Justice  declared  that  a  factor's  sale  does,  by  the  general  rule  of  law, 
'  rcatc  a  contract  between  the  owner  and  buyer.  liut,  notwithstanding  this, 
the  jury  found  for  the  defendant:  and,  being  asked  their  reason,  declared 
that  they  tliought  from  the  rirrumstances  no  credit  was  given  as  between  the 
owner  and  buyer,  and  that  the  latter  was  answeiable  to  tlie  factor  onlv,  and 
he  only  to  the  owner.  Vide  Escot  v.  Mil  ward,  (in  this  note,)  where  this 
case  is  considered  as  law. 

Drink'.v.'xter  and  otiiers,  assignees  of  Dowding,  v.  Goodv\iii,  Coup.   J.  1 
.\.  D.  1773.     Assumpsit.  General  issue.     W.rdict  for  i)laintiffs  on  a  speciui 
case. 

J.  Dowding,  tlie  Irankrupt,  was  a  clothier,  and  employed  Jeffries  a  liiclor, 
who  sold  to  the  defendant  the  goods  in  question  marked  I.  DOWDING: 
the  clothes  were  sold  by  Jeffries,  as  factor,  and  the  defendant  knew  him   to 


30 


3ET-CrFF    BY     STATUTE 


If  an  agent  have  a  commission  del  credere,  it  is  presumptive 
proof  that  he  dealt  as  principal.  {2s) 


be  so,  in  the  usual  course  of  his  business,  and  in  his  own  name.  The  money 
was  puid  by  the  defendant  to  Jeffries,  after  notice  to  him  from  the  assignees 
not  to  pay  it.  Jeilries  was  a  creditor  of  Do wding's  to  a  greater  amount  than 
the  value  of  the  goods. 

After  hearing  the  argument,  Lord  Mansfield — "  Jeffries  sold  these  goods 
to  the  defendant  Goodwin  in  his  own  name,  and  without  any  rell;rence  to  the 
principal,  or  without  even  making  the  principal  creditor  for  them.  But  the 
goods  are  marked  1.  DO  W DING  ;  therefore  the  defendant  must  have  known 
he  was  the  principal,  and  that  v/as  the  reason  of  making  that  fact  a  part  of 
the  case."  A  few  days  after,  his  Lordship,  in  delivering  the  opinion  of  the 
court,  said, 

"  We  think  tliat  a  factor  who  receives  clothes,  and  is  authorised  to  sell 
them  in  his  own  name,  but  makes  the  buyer  debtor  to  himself,  though  he 
is  not  ansAverable  for  the  debts,  yet  he  has  a  right  to  receive  the  money  :  his 
receipt  is  a  discharge  to  the  buyer  ;  and  he  has  a  ri.^-lit  to  bring  an  action 
against  him  to  compel  the  payment,  and  it  would  be  no  defence  for  the  buyer 
in  that  action  to  say,  that,  as  between  him  and  the  principal,  he  the  buyer 
ought  to  have  tliat  money,  because  the  principal  is  indi-bted  to  him  in  more 
money  than  that  sum :  for  the  principal  himself  can  never  say  that,  but 
■where  the  factor  has  nothing  due  to  him  :  there  is  no  case  in  law  or  equity 
where  a  factor,  having  money  due  to  him  to  the  amount  of  the  debt  in  dis- 
pute, was  ever  prevented  from  taking  money  for  clothes  in  his  hands. 

Ex  parte  lUurray,  1783.  Cooke  B.  Laws',  400.  One  Murray  of  Belfast 
in  Ireland,  in  1782,  consigned  a  quantity  of  linens  to  B.  and  H.  of  London, 
to  be  disposed  of  by  them  as  his  factors,  upon  a  del  credere  commission, 
B.  and  H.  sold  the  linens  for  192/.  14^,  and,  before  they  received  the  money> 
became  bankrupts.  The  assignees  afterwards  received  the  money,  which 
Murray  demanded  of  the  assignees,  who  refused  to  pay  it,  insisting  that 
Murray  might  come  in  as  a  creditor  vinder  the  commission.  Murray  peti- 
tioned that  the  assignees  might  be  ordered  to  pay  him  the  money  his  linen 
sold  for,  after  deducting  the  commissions  and  charges,  and  a  small  surn  due 
from  Murray  to  the  bankrupts  on  another  account. 

His  Lordship,  after  hearing  the  point  of  law  argued,  was  clearly  of  opinion 
that,  the  purchaser  not  having  paid  for  the  linens  previous  to  the  bankrupt- 
cy, Murray  the  consignee  was  entitled  to  receive  the  price  of  the  linen,  and 
accordingly  ordered  the  assignees  to  pay  him  the  money. 

Scott  v.  Surman,  Vv'illes  400.  A.  D.  1743.  (Appendix.)  The  assignees, 
after  the  bankruptcy  of  the  factor,  received  some  bounty  money  due  to  the 
principal  for  having  imported  some  goods.  In  an  action  by  the  principal 
against  the  assignees,  the  court,  on  a  case  reserved,  were  unanimously  of 
opinion  that  the  plaintiff  was  entitled  to  recover. 

2dly.  Where  the  debtor  of  the  agent  insints  tifton  a  right  to  set-off  a  debt  dw 
to  him  from  the  agerd. 

Scott  V.  Surman,  Assignees  of  Scott,  A.  D.  1742.  (Appendix)  Willes  100. 
Assumpsit.  Verdict  for  plaintiff  for  358/.  iOs.  subject  to  the  opinion  of  the 
court  on  a  case  in  substance  as  follows.     The  plaintiff  abroad  consigned  some 


IN    GENERAL.  31 


It  has  been  decided  that  if  a  factor  is  autlioriscd  to  sell  goods 


tar  to  Scott  liis  fiictor  in  England  ;  ulio  received  and  sold  it  to  be  paid  for  in 
notes  at  four  months  date,  after  deducting  31/.  due  from  the  fleeter  to  the  ven- 
dees The  factor  became  a  bankrupt.  The  sum  of  358/.  10.s\  consisted 
of  the  proceeds  of  the  tar  actually  received  by  the  asignees  from  the  vendees, 
and  of  the  31/.  The  court  were  unanimously  of  opinion  that  judgment  should 
be  entered  for  the  plaintilT  for  329/.  106'.  the  balance  remaining  after  de- 
ducting 31/.  from  358/.   109. 

Rabone  v.  Williams,  cited  7  T.  R.360.(App.  29.)  Action  for  goods  sold  to 
the  defendant  by  means  of  the  house  of  Rabone  and  Co.  at  Exeter,  factors  to  the 
plaintiff.  The  defendant,  th.e  vendee  of  the  goods,  set  off  a  debt  due  to  him 
from  Rabone  and  Co.  the  factors,  upon  another  account,  alleging  that  the 
plaintiff  aad  not  appeared  at  all  in  the  transaction,  and  that  credit  had  been 
given  by  Rabone  and  Co.  the  factors,  and  not  by  the  plaintiff.  Lord  Mans- 
field, Ch.  J.  Where  a  factor,  dealing  for  a  principal,  but  concealing  th.at 
principal,  delivers  goods  in  his  own  name,  the  person  contracting  with  him. 
has  a  ri.>ht  to  consider  him  to  all  intents  and  purposes  as  the  principal ;  and 
tliough  the  real  principal  may  appear  and  bring  an  action  upon  that  contract 
agaii;ist  the  purciiaser  of  the  goods,  yet  that  purchaser  may  set-off  any  claim 
he  may  have  against  the  factor  in  answer  to  tlie  demand  of  the  principal-^ 
Tliis  lias  been  long  settled.  In  Bailey  v.  Morley,  London  sittings  alter 
Michaelmas  1788,  Lord  Kenyon  recognised  the  law  of  this  case.  The 
case  of  George  v.  Clagget,  7  T.  R.  359.  (App.  29.)  was  decided  upon  the 
authority  of  this  case.  Escot  v.  Milward,  Cooke,  and  in  George  v.  Clagget, 
7  Ter.  Rep.  359.  (App.  29.)  Sittings  after  Micliaelmas  Term  1793.  This 
action  was  tried  at  (juildhall  before  Mr.  J.  Duller,  in  which  it  appeared  the 
plaintiffs  were  merchants  in  London,  and  in  June  1783,  had  a  quantity  of 
wiieat  consigned  to  them  from  Ostend,  the  sale  of  which  they  intrusted  to 
one  Farrer  as  their  factor.  The  factors  in  the  corn  trade,  like  tliose  in 
the  linen  trade,  receive  a  del  credere  connnission,  besides  their  factorage, 
and  never  communicate  the  names  of  the  purchasers  to  the  owners,  except 
in  case  of  the  factor's  failure.  I'arrer,  on  the  9th  June  1783,  sold  21 1  quar- 
ters of  the  plaintiff's  wheat  to  the  defendant  Milwaid.  On  the  16th  June, 
FaiTer  being  about  to  stop  payment,  gave  up  the  wheat  under  his  care  to  the 
phdniiffs,  and  sent  them  the  names  of  the  buyers.  On  the  20th  June  Far- 
rer stopped  payment,  and  a  short  time  afterwards  his  creditors  executed  a 
dcL-d  of  composition.  On  the  21st  June,  the  plaintiff  delivered  th.e  defend- 
ant, Mihvard,  a  bill  of  parcels  of  the  wheat  sold  to  lum  by  Farrer  as  their 
factor,  and  desired  him  to  accept  a  bill,  at  a  month,  for  the  amount ;  which  he 
refused,  insisting  that  he  had  a  right  to  set-off  a  debt  due  to  him  from  Farrer, 
against  tiie  price  of  the  wheat.  Mr.  J.  Ikilkr,  in  i»is  charge  to  the  jury, 
declared  the  doctrine  liid  down  by  LordCh.  J.  Lee,  in  Scrimshire  v.  Alder- 
ton,  2  Str.  Rep.  1168.  to  be  law;  but  as  the  factor  was  insolvent  for  some 
tinie  befoie,  irad  avoided  all  dealings  for  a  month,  had  desired  that  llure 
mi  -lit  be  no  buying  in  his  name,  and  had  not  dealt  willi  the  defentlanl  for  a 
year  befoie,  but  was  then  in  his  debt,  there  was  a  verdict  for  the  plaintiff  on 
the  ground  of  fraud. 

In  George  v.  Claggett,  2  Esp.  Cases,  .5  57.  E.  37  Ceo.  111.  7  Perm  Rep. 


32  SET-OFF     BY    STATUTE 


in  his  o^^ni  name,  and  he  make  the  buyer  debtor  to  himself, 
he  deals  as  principal :  though  the  goods,  when  sold,  arc  marked 


359.  A.  D.  1797.  (App.  29.)  Action  for  goods  sold  to  the  defendants  by- 
Messrs.  Rich  and  Ij[eapy,  who  were  the  plaintiff's  factors,  with  a  com- 
mission del  credere,  and  who  dealt  as  principals.  The  plaintiff  claimed  a 
right  as  principal  to  recover  the  price  from  the  buyer,  the  money  not  having 
been  actually  paid  over  to  the  factors  before  the  commencement  of  the  action. 
The  defendant  claimed  a  right  to  set-off  a  debt  due  to  him  from  Rich  and 
Heapy.  Lord  Kenyon  ruled  that  the  defendants  were  entitled  to  hold  the 
goods  ;  and  that  the  defendants,  having  dealt  a\  ith  Rich  and  Heapy  as  prin- 
cipals, should  not  be  turned  i\3und  by  the  plaintiff's  setting  up  himself  as 
principal,  and  considering  them  only  as  factors  :  that  he  had  in  a  case  before 
him  adopted  a  similar  principle  founded  on  a  determination  of  Lord  Mans- 
field, A  iz.  that  where  a  factor  deals  for  a  principal,  but  Avhicli  principal  does 
not  appear,  and  the  factor  delivers  the  goods  in  his  own  name,  if  the  person 
dealing  with  the  factor  on  his  own  account  has  any  demand  against  the  factor, 
iic  has  a  right  to  consider  the  factor  as  the  principal :  and  to  set-off  any  de- 
mand he  may  have  against  the  factor,  against  the  value  of  the  goods  so  sold, 
and  that  such  would  be  a  good  answer  to  any  action  brought  by  the  princi- 
pal for  the  price  of  the  goods.  His  Lordship  therefore  ruled  that  the 
defendant  was  entitled  to  a  verdict,  which  was  so  found  by  the  jury.  There 
was  a  motion  for  a  new  trial.  The  court  were  clearly  of  opinion  that  the 
directions  given  at  the  trial  were  right ;  and  that  this  case  was  not  distinguish- 
able from  that  of  Rabone  and  Williams. 

3dly.    IV/iere  the  ageiit  insists  ution  a  right  to  set-off. 

Grove  y.  Dubois,  1  T.  R.  112.  A.  D.  1786.  (App.  25.)  Assumpsit  by 
assignees  of  Bankrupt.  Set-off.  Verdict  on  a  special  case,  "  that  the  bank 
rupt,  being  an  underwriter,  subscribed  policies  filled  up  with  the  defend- 
ant's name  for  his  foreign  correspondents  Avho  were  unkno"\vn  to  the  bank- 
rupt ;  that  losses  hr.ppened  on  the  policies  before  the  bankruptcy  ;  that  the 
defendant  paid  the  amount  of  the  losses  to  his  foreign  correspondents  after 
such  bankruptcy  ;  that  the  defendant  had  a  commission  del  credere  from  his 
correspondents,  was  made  a  debtor  by  the  bankrupt  for  premiums,  and  al- 
ways retained  the  policies  in  his  hands."  The  court,  saying  that  the  whole 
turned  on  the  nature  of  a  commission  del  credere,  were  of  opinion,  that  the 
defendant,was  entitled  to  set-off  the  money  due  on  the  policies  to  this  action 
brought  against  him  bv  the  assignees  of  the  bankrupt. 

Bizev.Dickason,  l' T.  R.  285.  A.  D.  1786.  (App.  27.)  The  plaintiff, 
who  had  a  commission  del  credei'e,  Vwas  indebted  to  the  bankrupt  in  the  sum 
of  1356/.  Os.  od.  The  bankrupt,  an  underwriter,  had  subscribed  policies 
filled  up  with  the  plaintiff's  name  upon  which  losses  had  happened,  and  upon 
which  there  Avas  due  661/.  9.?.  10i7.  The  plaintiff,  taidng  for  granted  that 
he  Avas  not  entitled  to  set-off  the  661/.  9.9.  10a'.  paid  his  Avhole  debt  of  1356/. 
0,?.  od.  to  the  assignees  ;  but  aftenAards,  discoveiing his  mistake,  he  brought 
an  action  for  money  had  and  received  :  and,  upon  a  case  stated  for  the  opinion 
of  the  court,  recoA'e red  the  sum  of  661/.  9s.   lOrf. 

Wilson,  assignee  of  Fletcher,  v.  Watson  and  Creighton,  M.  23  Geo.  Ill 
Ksp.  Ni^i  Pri.  974.     The  defendants  were  insurancc-brokere,  and  the  bank 


IN    GENERAL.  33 


Tvitli  tlie  name  of  tlie  principal  *.  and  the  foctor  sell  a»s  factor  in 
the  usual  course  of  his  business,  and  the  buyer  kn.ow  him  to  be 
tactor.{'2t) 

To  a  demand  of  an  agent  who  deals  as  ])rinci]xil,  tiie  buyer 
cannot  set-off  a  debt  lo  him  from  the  principal. (2i') 
.4s  to  husband  and  wife. 

A  debt  due  to  a  man  in  right  of  his  wife  cannot  be  set-off  in 
an  action  against  him  on  his  own  bond.(2x) 

A  debt  of  the  wife's,  dum  sola,  cannot  be  set-off  against  a 
claim  made  bv  the  husband  alone  ;  unless  after  marriage,  he 
make  the  debt  his  own. (2^) 


rupt  before  his  bankruptcy,  had  underwritten  foi-  them  several  policies  on  the 
^oods,  the  property  of  others,  which  had  been  losses,  and  tor  which  the 
bankrupt  was  liable  :  to  an  action  brought  against  the  defendants  for  money 
due  to  the  bankrupt,  they  pleaded  a  set-oft"  of  these  losses  :  but  it  was  held  that 
the  losses  being  on  goods  the  property  of  others,  the  dc!jts  were  properly  to 
them,  not  to  the  brokers,  and  therefore  could  not  be  set-otf  to  a  demand  against 
the  broker  himself. 

(2«)  Vide  Escot  v.  Milward,  Cooke  400.  7  T.  R.  359.  George  v.  Clag- 
get,  7  T.  R.  339.  Grove  V.  Dubois,  1  T.  R.  112.  Bize  v.  Dickascn,  I  T. 
K.  2S5.  in  the  last  note. 

The  case  of  Escot  v.  Milward,  and  common  sense,^  seem  to  show  that  the 
del  credere  commisson  is  only  presumptive  proof. 

(2/)   Drinkwater  V.  Goodwin,  Cowp.  251.  in  note  (2r). 

{2v)  D.  Lord  Mansfield  in  Drinkwater  v.  Goodwin,  Cowp.  251.  in 
note  (2r). 

(2x)   Ex  parte  Walker,  C.  B.  E.  4  Geo.  III.  B.  N.  P.  179. 

{2y)  Wood  V.  Akers,  2  Esp.  Cases,  N.  P.  594.  M.  T.  38  Geo.  III.  This 
was  an  action  of  assumpsit  for  money  and  goods  sold  and  delivered.  Plea 
non-assumpsit  with  notice  of  set-ofi".  The  articles  containjd  in  the  set-off 
were  three  several  sums  of  money  which  were  stated  to  have  been  paid  by 
he  defendant  for  plaintiff,  aud  by  his  direction.  One  of  them  was  a  sum  of 
■ix  guineas,  stated  to  have  been  piiid  to  a  Mrs.  Grundy,  whicli  the  plaintiff's 
wife,  who  was  a  sister  of  the  defendant,  owed  her  for  lodging  before  l.er 
intermarriage  with  the  plaintiff.  The  counsel  for  the  pluinliiV  objected  to 
the  allowance  of  this  sum  in  the  present  action,  on  t:»e  ground  that  lliis  was 
an  action  by  the  husband  alone,  and  the  del)t  attempted  lo  l)e  set-off  was  a 
del)t  due  1)y  the  wife  before  the  nvirriage,  for  wnicli  the  action  should  be 
against  husbanrl  and  wife.  It  was  answered  tliat  the  husljand  havin;^  order- 
ed the  money  to  be  puid,  had  tliereby  made  the  debt  his  own.  Eyre,  Ch.  J. 
said,  that  for  a  debt  of  the  wife  dum  sfJa,  ilie  action  must  be  against  husband 
and  wife,  and  therefore  could  not  be  set-off  against  a  claim  made  by  t!ie 
husband  alone,  and  for  wliich  tlie  action  was  brougiit:  but  if  it  ap[)L-ared  that 
llie  husband,  after  the  marriage,  iiad  ordered  tiie  debt  to  l>e  paid,  he  tlureUy 
made  it  his  own,  and  that  it  could  be  set-oil".     The  defendant  proved  tlial  the 


34  SET-OTF    BY    STATUTE 


jis  to  executor  or  administrator, 

A  debt  from  an  executor  in  his  own  nghi  cannot  be  set-oiF 
against  a  debt  to  the  tcstator(2z)  even  though  the  executor 
is  residuary  legatee. (3ft) 

A  debt  which  accrued  in  the  Hfe-time  of  the  testator  cannot 
be  set-off  against  a  debt  that  accrues  to  the  executor  after  the 
death  of  the  testator.(36) 


husband  had  done  so,  and  was  allowed  the  sum  in  his  set-off:  but  the  plain- 
tiff had  a  verdict  for  tlie  residue  of  his  demand. 

(2-)  Bishop  V.  Church,  3  Atk.  691.  A.  D.  1748.  The  plaintiff  was  the 
residuary  legatee,  and  surviving  executrix  of  her  husband,  to  whom  Church 
and  one  Owen  had  given  a  joint  bond.  Church,  one  of  the  oblip,ors  died, 
and  the  plaintiff  was"  indebted  upon  her  own  private  account  to  Owen,  who 
was  a  bankrupt.  Lord  Chancellor  said,  it  was  admitted  this  could  not  be 
set-off  at  law,  nor  did  he  know  of  any  instance  here.  The  debts  are  due  in 
different  rights :  the  act  of  2  Geo.  II.  does  not  comprehend  this  case,  nor  is 
it  within  5'Geo.  II.  [postea,]  for  here  was  no  mutual  credit  between  the  par- 
ties, and  this  had  been  before  determined  in  Ex  parte  Hope. 

(3a)  This  may  be  collected  from  the  foregoing  case  of  Bishop  v.  Church 
ill  the' last  note  :  but,  query  whether  equity  would  not  interfere  where  there 
Avas  a  residuum.  Vide  Lanesho'  v.  Jones,  1  P.  W.  3230,  &c.  postea— (and 
vide  Set-off  in  Equity,  postea.) 

(36)     Shipman  v.  Thompson,  Bull.  N.  P.  180.  A.  having  been  appointed 
by  B.  his  attorney,  to  receive  his  rents,  did,  after  his  death,  receive  rents  in 
arrear  in  B's  life-time  :  B's  executrix  brought  an  action  for  the  money  in 
her  own  name  ;  the  defendant  gave  notice  to  set-off  a  debt  due  to  him  from 
the  testator  which  was  not  allowed  at  the  trial,  because  the  testator  never  had 
any  cause  of  action  against  the  defendant,  for  the  money  was  not  received  till 
after  his  death.     The  same  case  is  reported  in  Ch.  J.   Willes'  Rep.  103.  A. 
D.  1738.  C.  B.  (App.  30.)     This  came  before  the  court  on  a  case  reserved 
at  the  trial  before  Mr.  Baron  Fortescue.     The  plaintiff's  late  husband  by  his 
will  made  the  plaintiff  and  Dr.  Morgan  (since  deceased)  his  executors :  in  his 
life  time  he  had  appointed  the  defendant    his  steward  by  letter  of  attorney, 
■who,  afterthe  testator's  death,  received  of  several  tenantsseveralsumsof  money 
due  to  the  testator  in  his  lifetime.  The  plaintiff  brought  this  action  inherown 
name,  not  naming  herself  executrix^  for  the  money   so  received.     The  de- 
fendant gave  notice  to  set-off  several  sums  due  from  the  testator  to  him, 
which  the  judge  would  not  permit  the  defendantto  set-off.  The  cjuestions  reser- 
ved were,  1st.  Whether  the plainliffshould  not  have declaredas  executrix:  2dly. 
Whethev  the  defendant  ought  not  to  have  been  permitted  to  set-off  the  mo- 
ney due  to  him  from  the  testator.     The  court,  after  argument,  gave  judg- 
ment for  the  plaintiff.     The  reasons  given  by  the  Court  of  Common  Pleas 
do  not  ai)pear  in  Lord  Ch.  J.  Willes'  papers  :    but  the  same  case  was  refer- 
red to  the  opinion  of  Mr.  Baron  Fortescue,  before  whom  the  cause  was  tried, 
who,  after  hearing  the  cause  argued,  gave  the  folloAving  judgment  in  favor 
of  the  plaintiff.     "  As  to  the  set-off:  we  cannot  consider  the  convenience  or 
the  inconvenience  on  one  side,  or  the  other,  but  must  go  accordmg  to  the  act : 


IN    GENERAL. 


II.  The  next  requisite  to  enable  a  person  to  give  a  set-off  in 
evidence  is,  that  "  the  debts  be  due  at  the  eommencement  of  the 
action.^'{'3c) 


for  the  statute  2  Geo.  II.  ch.  22.  s.  13.  says,  ov  if  either  fiarty  sues  or  is 
sued  as  executor  or  administrator^  where  there  are  mutual  debts  between  the 
testator  or  intestate,  and  either  party,  one  debt  may  be  set-off  against  the 
other  ;  so  that  it  is  confiPied  by  the  statute  expressly  to  cases  where  the 
suit  is  as  executor  or  administrator.  And  therefore,  in  the  present  case  the 
suit  not  beiu'^- as  executor,  I  think  it  is  not  within  the  statute,  and  that  the 
debts  due  from  tiie  testator  to  the  defendant  cannot  be  set-off  against  the 
plaintiff  in  an  action  brought  by  her  in  her  own  name  and  not  as  executor. 
And  supposing  this  to  be  so,  it  was  urged  as  one  reason  why  the  action 
here  ouglit  to  have  been  brought  by  the  plaintiff  as  executrix  :  but  this  sta- 
tute will  not  alter  the  law  as  to  that  point  from  what  it  was  before  ;  and  if  the 
statute  has  not  remedied  all  the  inconveniences,  we  must  take  it  as  it  is,  and 
cannot,  I  think,  extend  it  further.  So  the  postea  must  be  delivered  to  the 
plaintiff,  and  she  must  have  her  judgment."  To  the  above  Mr.  B.  For- 
tescue  afterwards  added  this  note:  "  N.  B.  The  Court  ofC.  B.  on  a  case 
made,  were  of  the  same  opinion,  as  to  both  points."  The  same  point,  rela- 
tive to  the  set-off,  has  been  since  determined  in  the  Court  of  King's  Bench 
in  two  cases,  Kilvington  v.  Stevenson,  E.  T.  1768,  on  demurrer;  and  Teg- 
getmeyer  v.  Lumlev,  T.  T.  25  Geo.  III.  on  a  motion  for  a  new  trial.— 
Te^p-etmeyer  v.  Lumlev,  T.  25  Geo.  III.  MS.  Action  of  covenant  by  execu- 
tors^for  rent  due  in  the  life-time  of  the  testator  and  also  since  his  death.  Plea  of 
set-off  for  money  due  from  the  testator.  Verdict  for  defendant.  Erskme 
moved  for  a  new  trial  on  the  ground  that  the  defendant  could  not  set-off  a 
debt  from  the  testator  to  an  action  for  rent  since  his  death,  and  cited  the  cases  ol 
Ridout  and  another,  assignees,  v.  Brough,  Cowp.  133.  and  Shipman  v. 
Thomijson,  Buller's  Ni.  Pri.  180.  He  also  cited  a  note-book  of  Mr.  J. 
Yates  of  the  case  of  Kilvington  v.  Stephenson,  where  it  was  held  on  demur- 
rer that  a  debt  from  the  testator  could  not  l)e  set-off  against  an  action  for 
troods  sold  by  executors,  as  it  would  disturb  the  course  of  administraUon.— 
Cowpcr  shewed  cause— They  have  sued  as  executors,  and  as  such  protect 
themselves  from  costs,  and  have  united  both  demands.  1  he  balance  be- 
tween the  narties  in  the  general  account  is  the  justice  of  the  case.  1  he  case 
l-st  cited  is  only  a  deiTumd  for  a  debt  subsequent  to  the  death,  without  any 
prior  dem;UKl,  and  the  reason  that  presses  is  the  distuibance  oi  assctls  The 
anwswer  to  that  is,  it  is  the  executor's  fault.  Lord  Mansfield  said  he  was 
satisfied  on  the  authoritv  of  tlie  cases  cited,  and  made  the  rvde  for  a  new  trial 
absolute.     Reported  in  Willes'    Reports  261,  in  n"te  ( App.  W.) 

(30  Reynolds  v.  lieering  B.  R.  M-  25  Geo.  Ill  Douglas'  Rep  12  n. 
where  it  was  determined  on  a  demurrer,  that  a  judgment  olna.ned  by  the 
defendant  against  the  plaintiff,  after  the  declaration  was  delivered  -»;'  >«^';>';^ 
the  plea  pleaded,  may  be  pleaded  as  a  sel-oH  ;  and  that  although  U  dul  n  < 
appear  that  the  cause  of  acti.,n  on  winch  the  dehndant  s  judgment  v.  ob- 
taincd  was  prior  to  the  commencement  ol  the  planu.tl  s  ac  mn.  But  in 
Kvans  V.  Prosser,  B.  R.  E.  20  G.o.  III.  3  Term  Rep.  )«r,.  (Appen.  41.)  v 


36  SET-OFF    BY    STATUTE 


A  judgment  recovered  by  the  defendant  after  the  com- 
mencement of  the  plaintiff  's  action  cannot  be  sct-oti'  in  that 
action.  (3c) 

A  judgment  recovered  by  the  defendant  before  the  com- 
mencement of  the  plaintiff's  action  may  be  set-off,  though  a 
wi^it  of  error  is  pending  on  the  judgment. (3c) 

An  attorney  may  set-off  his  bill,  though  it  was  not  delivered 
a  month  before  the  commencement  of  the  action:  it  ought,  if 
possible,  to  be  delivered  time  enough  to  be  taxed  ;  but  it  seems 
that  it  must  be  delivered  time  enough  to  prevent  the  plaintiff's 
being  sui'prised  at  the  trial. (3 r/) 


was  deterrnined  that  a  plea  of  set-off  that  the  plaintiff  was  indebted  to  the 
defendant  at  the  time  of  the  plea  pleaded  is  bad ;  and  that  it  should  state 
thai  he  was  indebted  at  the  commencement  of  the  action.  On  the  day  after 
the  judgment  v.as  given  in  Evans  v.  Prosser,  i'uller,  J.  said,  he  had  Icok- 
ed  into  the  case  of  Reynolds  v.  Beering,  and  found  that  it  could  not  be  sup- 
ported. One  question  which  arose  there  was,  whether  a  judgment  could 
be  pleaded  by  way  of  set-off  pending  a  v/rit  of  error :  which  the  Court  were 
of  opinion  might  be  done  ;  and  so  far  the  judgment  was  right.  On  the 
other  point  there  ruled,  namely,  that  a  judgment  recovered  after  the  action 
was  brought,  and  before  plea  pleaded,  might  be  pleaded  by  v/ay  of  set-off — ■ 
perhaps  the  Court  did  not  consider  the  strict  law  so  much  as  the  justice  of 
the  case.  But  this  point  cannot  be  supported  :  on  which  judgment  was  given 
for  pkuntiff. 

fodj  Martin  v.  Wmder,  note  in  Doug.  Rep.  195.  Law  moved,  on  tlie 
part  of  the  defendant,  who  was  an  attorney,  for  a  rule  to  shew  cause  why  the 
proceedings  should  not  be  staid  till  his  bill  should  be  paid,  or  till  a  month  from 
tire  delivery  of  it  should  expire,  that  he  might  be  enabled  to  set  it  off:  the 
Court  held  that,  though  an  attorney  cannot  bring  an  action  on  his  bill  till  it 
has  been  delivered  a  month,  that  circumstance  is  not  necessary  to  enable 
him  to  set-off — he  must  not  produce  it  at  the  trial  by  surprise  ;  but  it  is  suffi- 
cient, in  such  case,  to  deliver  it  to  the  plaintiff  time  enough  to  have  it  taxed 
before  the  trial.  Upon  hearing  this  opinion  of  the  Court,  Law  withdrew  liis 
motion  as  unnecessary. 

Bulmah  v.  Burldtt,  1  Esp.  Cases,  N.P.  449.  H.T.  36Geo.in.  Assump- 
sit for  goods  sold  and  delivered.  Plea  of  the  general  issue  and  a  set-off. — 
The  action  was  brought  to  recover  the  amount  of  a  tailor's  bill.  The  set-off 
Avas,  for  business  done  for  the  plaintiff  as  an  attorney.  It  became  a  question 
whether  the  party  was  bound  to  deliver  a  bill,  under  the  statute  2  Geo.  ILin 
the  same  manntr  as  if  he  had  been  plaintiff  in  the  actioi*.  Lord  Kenyon. 
The  rule  is,  that  when  an  attorney  means  to  avail  himself  of  his  bill  for  bu- 
siness done,  and  to  give  it  in  evidence,  he  must  deliver  in  a  bill  signed  to  the 
plaintiff;  but  it  is  not  necessary  llwit  a  month's  time  should  intervene  be- 
tween the  delivery  and  the  action.     The  cause  was  referred. 

Hooper  v.  Till  Sc  Ux.  Doug.  199.  A.  D.  1779.  iNIotion  to  make  a  rule 
absolute  for  taxing  an  attorney's  bill  after  judgment :  Lord  Mansfield  absent 


IN     GENERAL. 


SECTION  II. 

Of  a  person'' s  option  to  waive  or  to  avail  himself  of  lis  right 
to  set-off. 

It  is  optional  with  the  defendant  whether  he  will  waive  or 
avail  himself  of  his  right  to  sct-off.(3<?) 

A  set-off  reducing  the  plaintiff's  demand  under  forty  shill- 
ings does  not  affect  the  jurisdiction  of  the  superior  court.(3y') 


Pjiiller,  J.  read  a  note  of  a  case,  where  Lord  Mansfield  and  the  Court  had 
refused  to  pern:iit  a  bill  to  be  referred  to  the  master  to  be  taxed,  because  it  had 
been  read  in  evidence  at  Nisi  Prius,  on  a  notice  of  set-ofl",  in  a  cause  where 
the  i.ttorney  was  defendant,  which  shewed  that  it  had  been  delivered  a  month, 
and  they  held  tliat  it  was  then  too  late  to  dispute  the  amount  of  the  items. 
Tiiis  case  seems  to  pro\e  only  that,  after  judgment,  where  a  set-ofiC  on  an 
attorney's  bill  has  been  giv^m  in  evidv-nce,  it  is  presumed  that  the  bill  was  de- 
livered a  month  previous  to  the  commencement  of  the  action. 

(oe)  The  words  of  the  statute  arc,  one  debt  maij  be  set  against  the  other, 
and  such  matter  may  be  given  in  evidence,  Sec. 

(af)  Pitt  V.  Carpenter,  B.  R.  1  Wilson's  Rep.  19.  A.  D.  1743.  Action 
upon  the  case  ;  defendant  pleaifed  a  setoff,  and  upon  the  trial  the  plaintifY 
proved  there  was  due  to  him  from  the  defendant  47.  1 5s.  M.  and  the  defen- 
dant proved  the  plaintiff  ov.  ed  him  3/.  2s.  so  that  the  balance  due  to  the 
plaintiff  was  only  1/.  l.'j.v.  Sr/.  for  which  he  had  a  verdict.*  Per  curiam. 
The  demand  of  the  plaintiff  remains  as  it  did  before  the  statute  for  setting- 
off  one  debt  against  another  :  and  if  the  inferior  court  should  have  jurisdic- 
tiorwn  this  case,  it  would  be  very  inconvenient ;  for,  suppose  there  are  mu- 
tual demands  of  10,000/.  between  merchants,  and  upon  the  balance  there 
should  happen  not  to  be  above  40s.  due,  that  coiul  would  have  jvirisdiction  in 
that  case,  as  well  as  in  the  present,  if  we  should  allow  this  ;  so  the  rule  w  as 
discharged,  and  the  plaintiff  had  judgment.  This  doctrine  is  recognised  in 
Fitzpatrick  v.  Pickering,  C.B.  2  \Nilson  68.  A.  D.  1773. 

Gross  V.  Fisher,  C.B.  J  ^Vilson  48.  A.  D.  1770,  Assumpsit  for  goods 
sold  and  delivered.  Defendant  pleaded  a  set-off ;  and  upon  the  trial,  the 
plaintiff  proved  there  was  due  to  him  from  the  defendant  43  shillings,  and 
the  defendant  proved  that  tb.e  plaintiff  owed  him  4  shillings  ;  so  that  the  ba- 
lance due  to  the  plaintiff  was  thereby  reduced  to  39  shillings,  for  which  sum 
he  hud  a  verdict.  Curia.  'I'here  is  a  difference  between  the  case  of  mutual 
Hchls  subsi^Aing  where  the  plaintiff's  demand  is  n\ore  than  40  shillings,  the 
■lefendant's  demand  at  the  time  of  the  commencement  of  the  action  reduchig 
it  to  a  less  sum  ;  and  the  case  where  the  plaintiff's  original  demand  was 
more  than  40  shillings,  and  the  defendant,  before  the  commencement  oflb.e 
action,  hath,  by  fuiyinrnt  in  part,  leduced  it  to  less  than  40  shillings.  In  the 
first  case  the  plaintiff  must  sue  here,  or  lose  part  of  hisd.mand,  because  he 
d(Jth  not  know  whether  the  defendant  can  or  will  set-off  any  demand  against 
him  ;  but  in  t!ie  latter  case,  the  plaintiff,  well  knowing  that  he  hath  been  paid 
such  part  of  i.is  original  deuiand  as  reduces  it  to  less  than  40  shillings,  hath 
no  1  ight  to  come  to  liiis  court  and  demand  more  than  40  shillings,  but  must 

•  On  .nn  applicution  to  llie  Court,  tliut  Uiis  was  williin  Uic  jurisdittloh  of  ilic  Court  of 
Conscience. 


SET-OFF   BY  STATUTE 


The  commencement  of  an  action  or  a  verdict  is  no  waiver 
of  the  right  to  set-off  the  debt. (3^) 


cjo  to  the  county  co\r.t.  In  the  first  case,  mutual  debts  are  subsisting  at  the 
commencement  of  the  action  ;  in  the  latter  case,  not  ;  for  payment  of  part  by 
the  defendant  to  the  plaintitf  himself  is  not  a  debt  owing  by  the  plaintiff  to  the 
defendant,  but  a  discharge  of  the  plaintiff's  demand  pro  tanto.  No  set-off 
is  used  or  necessary  in  such  cases  ;  but  payment  of  part  is  proved  under  non- 
assumpsit.  We  cannot  allow  the  suggestion  to  be  entered  ;  so  the  rule  must 
be  discharged. 

{2g)  Baskerville  v.  Brown,  et  e  contra,  2  Burr.  Rep.  1229.  A.  D.  1761. 
(App.  42.)  Brown  brought  an  action  against  Baskerville  upon  two  promis- 
sory notes,  amounting  (both  together)  to  the  sum  of  30/.  The  cause  was 
entered  and  tried  before  Lord  Mansfield  at  the  Sittings  ;  and  the  plaintiff  took 
a  verdict  for  the  tvhole  of  his  demand.  Baskerville  has  also  brought  an  ac- 
tion against  Brown  for  11/.  I8s.  for  taylor's  work  done  by  him  for  Brown  : 
and  this  cause  v/as  likewise  entered  and  tried  at  the  very  same  Sittings  ;  but 
it  happt^ned  that  the  former  cause  (wherein  Brown  was  plaintiff)  was  first  en- 
tered and  first  tried.  In  the  latter  cause  fwherem  Baskerville  was  plaintiff^ 
the  therein  defendant  (Brown)  had  given  notice  of  a  set-off  of  so  much  o^ 
the  before-mentioned  two  promissory  notes  as  would  sviffice  to  answer  Bas- 
kerville's  demand  against  him  ;  and  he  was  ready  at  the  trial  to  have  done 
so,  not^'i^thstanding  his  having  taken  a  verdict  for  the  v.  hole  30/.  in  tlic  cause 
wherein  he  v.as  plaintiff.  But  Baskerville's  counsel  opposed  tlus,  and  ip- 
sisted  that  Brov/n  had  estopped  himself  from  making  this  set-off,  by  having 
taken  a  verdict  for  the  tvhole  of  his  demand ;  whereas  he  ought  (as  they  in- 
sisted) to  have  left  out  so  much,  in  taking  his  verdict,  as  was  equal  to  Bas- 
kerville's demand  upon  him.  Lord  Mansfield,  at  the  trial,  inclined  against 
allowing  the  set-off;  but  he  thought  it  a  matter  that  desei-ved  consideration. 
It  was  accordingly  brought  before  the  court,  for  their  consideration,  hi  the 
form  of  a  motion  made  on  the  part  of  the  defendant  Brown,  for  a  rule  upon 
Baskerville,  the  plaintiff,  to  shew  cause  w^hy  the  verdict  (which  had  been 
found  for  Baskerville)  should  not  be  set  aside  ;  and  why  the  defendant.  Brown, 
should  not  have  the  costs  of  a  nonsuit.  Lord  INIansfield  now  delivered  the 
resolution  of  the  Court.  Per  curiam,  unanimously.  Verdict  set  aside,  and 
the  defendant  to  have  the  costs  of  a  nonsuit ;  and  Brown  to  remit  so  much 
of  his  damages  recovered  in  the  other  action,  as  exceeds  the  balance  of  the 
mutual  debts. 

Knibbs  v.  Hall,  one,  8cc.  Peake's  Cases,  N.  P.  -310.  A.  D.  1794.  This 
was  an  action  brought  for  the  use  and  occupation  of  certain  rooms  :  the  de- 
fendant pleaded  the  general  issue,  and  gave  notice  of  set-off  for  business  as 
an  attorney,  &c.  Th.e  defendant  had  brought  a  cross  action  for  his  bill  of 
costs,  wliich  was  made  the  subject  of  a  set-off:  That  debt  liad  accrued,  and 
the  action  on  it  was  commenced  before  the  debt  for  wluch  the  present  action 
was  brought  had  become  due.  Garrow,  for  the  plaintiff,  objected  that  these 
were  not  such  mutual  debts,  at  the  time  of  the  commencement  of  the  plam- 
tiff's  action,  as  would  entitle  the  defendant  to  sue  the  plaintiff ;  and  also  to 
set-off  his  debt.  To  enable  him  to  do  so,  lie  contended  that  the  debt  for 
which  the  present  action  was  brought  should  have  been  due  at  the  time  the 


IN    GENERAL.  39 


It  is  said  to  have  been  ruled  at  Nisi  Prius  that,  in  an  action 
of  indebitatus  assumpsit,  the  defendiuit  may  plead  a  sct-ofF, 
though  he  expressly  promised  to  pay  the  debt  for  which  the 
action  is  brought,  without  availing  himself  of  his  right  to  set- 

offJS/i) 

SECTION   III. 
Of  the  pleadings  and  of  the  mode  of  setting-off  debfs.fSiJ 
When  there  are  mutual  debts  subsisting  between  a  testator 


defendant  commenced  his  action  against  the  plaintiff.  Lord  Kenyon  over- 
ruled this  objection  ;  being  clearly  of  opinion  that  these  were  mutual  debts 
inthin  the  meaning  of  the  statute.  This  and  the  other  cause  were  referred 
to  arbitration. 

fS/iJ  Lechmere,  Esq.  v.  Hawkins,  Gent.  2  Esp.  Cases,  N.  P.  626.  H. 
58  Geo.  III.  Assumpsit  on  a  promissory  note  for  30/.  made  by  the  defen- 
dant and  payable  to  the  plaintiff.  Plea  non  assumpsit,  with  a  notice  of  set-off. 
In  the  summer  of  the  preceding  year,  the  defendant  having  been  in  Scotland 
xipon  business,  where  the  plaintiff  then  resided,  and  being  in  Avant  of  money, 
appUed  to  the  plaintiff  for  the  loan  of  the  sum  he  wanted.  Prior  to  this  pe- 
riod the  defendant  had  been  concerned  for  the  plaintiff  as  his  attorney  ;  and 
the  plaintiff  was  then  considerably  in  his  debt.  It  was  stated  for  the  plaintiff,, 
that  the  defendant  had  promised  to  pay  this  money  so  lent,  notwithstanding 
tlie  defendant  was  then  his  debtor  ;  and  letters  were  produced  in  evidence 
from  the  defendant  to  the  plaintiff,  wherein  he  promises  to  pay  the  money  the 
plaintiff"  had  so  lent  him,  and  for  which  the  note  had  been  given,  without 
taking  any  notice  of  the  debt  the  plaintiff  then  owed,  or  affecting  to  set  one 
demand  against  the  other.  Upon  this  evidence,  Erskine,  for  the  plaintiff, 
contended  that  the  defendant  could  have  no  benefit  of  his  set-off.  In  that 
case,  where  a  creditor  borrows  money  of  his  debtor,  under  an  express  pro- 
mise to  pay  it,  it  bound  him  under  every  circumstance  to  the  absolute  i)ay- 
ment ;  nor  could  his  undertaking  be  satisfied  by  setting-off  the  del)t  against 
his  own  demand.  Lord  Kenyon  said  he  knew  no  sucli  law,  nor  did  lie  think 
there  was  any  such  legal  obUgation  on  tlie  creditor :  it  might  be  an  honorary 
ol)Ugation,  and  such  as  a  man  who  gave  it  ought  to  observe  ;  but  if  he 
thought  fit  not  to  consider  such  an  ol)hgaUon  as  binding,  he  could  not  com- 
pel him.  There  were  mutual  subsisting  demands  at  the  time  ot  the  action 
brovight,  and  such  as  the  statutes  of  set-off  gave  the  party -defendant  jjower 
to  set  against  the  plahuiff's  demand:  Besides  this,  if  he  was  to  refuse  the 
set-off  iiere,  it  would  drive  the  defendant  into  a  court  of  e(|uily,  wliere  llie 
judgment  obtained  here  would  Ik-  set-off  against  ihe  debt  adniilted  to  be  due 
by  the  plaintiff  to  the  defendant.  He  tiierefore  overruled  llie  ol)jeclion,  and 
admitted  the  defendant  to  go  into  evidence  of  liis  sel-olT.  'i'lie  cause  was 
referred.  \'idc  ante,  note  (r)  and  Atkinson  v.  Elliol,  7  Term  Hep.  ZTfi. 
(Appendix.) 

(30  The  following  is  the  substance  of  the  two  statutes  relating  to  this 
point,  ante,  page  16: 

The  debts  may  be  set-off  by  being   given  in  evidence  upon  tlie  general 
issue,  or  by  being  pleaded  in  bar  :  except  wlicre  either  of  the  debts  accrues 


40  SET-OFF    BY    STATUTE 


and  another  person,  the  executor  will  be  indemnified  in  setting- 
off  these  debts  without  bringing  an  action.  {3k) 

When  it  is  intended  to  give  a  set-oif  in  evidence,  there  are 
two  subjects  of  consideration  : 

/.  IFhether  it  is  optional  either  to  plead  or  to  give  no- 
tice;  and,  when  optional,  xvhich  mode  of  proceeding  is  prefera- 
ble.     II.  Of  the  nature  of  the  notice  and  of  the  pleadings. 

I.  Of  the  defendant's  option  either  to  plead  or  to  give  notice, 
and  of  the  preferable  mode  of  proceeding. 

When  either  of  the  debts  accrues  by  reason  of  a  penalty 
contained  in  a  specialty,  the  debt  intended  to  be  set-off'  must 
be  pleaded  in  bar :  but,  in  all  other  cases,  the  defendant  may 
plead  or  give  notice  of  set-off  at  his  election.  (3/)  If  the  de- 
fendant's" demand  be  equal  to,  or  greater  than,  the  plaintiff's, 
the  action  being  barred,  it  is  proper  to  plead  the  set-off:  but 
where  the  defendant's  demand  is  less  than  the  plaintiff's  a  no- 
tice of  set-off  should  be  given,  and  a  set-off  is  usually  pleaded 
in  country  causes  to  save  the  trouble  and  expense  of  provuig 
the  service  of  a  notice. (3/) 

When  the  defendant's  demand  is  less  than  the  plaintiff's  the 
defendant  should  move  the  court  wherein  the  action  is  com- 
menced for  leave  to  pay  so  much  money  into  court  as  will  sa- 
tisfy the  plaintiff's  demand. (3/) 

It  seems  not  to  be  settled  whether  a  defendant  may  plead  a 
set-off  after  he  has  been  ruled  to  abide  by  his  plea  :  but  in  all 
cases,  except  where  either  of  the  debts  accrues  by  reason  of  a 
penalty  contained  in  a  specialty,  the  same  end  may  be  attained 
by  pleading  the  general  issue  and  giving  notice  of  set-off.  (3?7?) 


by  reason  of  a  penalty  contained  in  a  specialty  ;  when  the  debt  intended  to 
be  set-ofl'  must  be  pleaded  in  bar,  and  the  plea  must  state  how  much  is  truly 
and  justly  due  on  either  side  :  but,  in  all  cases  where  the  general  issue  is 
pleaded,  notice  must  be  given,  at  the  time  of  pleading,  of  the  particular 
sum  or  debt  intended  to  be  set-off,  and  upon  v/hat  account  it  became  due, 

(3.^)  Brown  v.  Holyoak,  Bull.  Ni.  Pr.  179. 

(3/)  Tyd.  K.  B.  406. 

(3w)  Cochnin  v.  Robertson,  M.  T.  20  Geo.  III.  B.  R.  Cowper  moved  to 
set  aside  a  rule  to  plead  several  matters,  and  the  plea  of  set-off  pleaded  in 
consequence  thereof,  upon  this  objection,  that  the  defendant,  having  pleaded 
a  judgment  recovered  in  a  former  action,  the  plaintiff  obtained  a  rule  for  the 
defendant  to  alnde  by  his  plea,  or  plead  such  other  as  he  would  abide  by  : 
the  defendant  had  pleaded  a  set-off  which  Cowper  insisted  he  could  not  do, 
but  could  only  plead  the  general  issue  after  waviiig  his  special  plea.     Buller, 


IN    GENERAL.  41 


II.   Of  the  nature  of  the  notice  and  of  the  pleadings. 
As  to  the  notice. 

The  notice  of  set-off  may  be  given  under  any  general  issue 
to  an  action  where  a  set-off  may  be  given  in  evidence. (o/z) 

The  notice  of  set-off  must  Idc  so  framed  as  to  prevent  the 
plaintiff's  being  surprised  at  the  trial  by  the  nature  of  the  evi- 
dence.(oo)  h.{2,p) 

The  notice  should  be  neai'ly  as  certain  as  a  declaration. (3o) 

If  there  are  any  special  circumstances  they  must  be  specially 
stated  in  the  notice. (3/;) 


J.  said  the  practice  was  so  ;  but  that  the  defendant  might  have  pleaded  the 

gciieral  issue,  and   given  notice  of  set-off ;  and  that  this  was  a  fair  plea. 

Cowper  admitted  the  fairness  of  the  plea,  and  said  that,  if  the  defendant 
would  take  short  notice  of  trial,  he  had  no  objection  to  it. 

{on)  Gov/er  v.  Hunt,  1  B.  104.  Bull.  Ni.  Pri.  181.  In  covenant  upon  an 
indenture  for  non-payment  of  rent,  the  defendant  pleaded  "non  est  factum," 
and  gave  a  notice  of  set-ofF.  Mr.  J.  Dentcn,  ut  the  assizes,  was  of  opinion 
he  could  not,  upon  this  issue  :  but,  upon  a  motion  for  a  new  trial,  the  court 
held  the  evidence  ought  to  have  been  received,  for  the  general  issue  men- 
tioned in  the  act  must  be  understood  to  be  any  general  issue  ;  and  accord- 
ingly ordered  a  new  trial. 

(jo)  The  notice  of  set-off  was  as  follows:  "  Take  notice,  that  you  are  in- 
''  debted  to  me  for  the  use  and  occupation  of  a  house  for  a  long  time  held  and 
*•  enjoyed  and  now  lately  elapsed."  The  debt  intended  to  be  set-off  was  rent 
rcs-rved  on  a  lease  by  indenture,  which,  not  being  mentioned  in  the  notice, 
could  not  be  given  in  evidence  :  for  if  it  had  been  sliown,  die  pUdntiff  might 
probj-bly  have  proved  tin  eviction,  or  some  other  matter  to  avoid  the  demand. 
These  notices  should  be  almost  as  certain  as  declarations.  Bull.  Ni.  Pri.  179. 
But  note,  this  was  before  the  statute  1 1  Geo.  II.  ch.  19,  which  gives  the  ac- 
tion for  use  and  occupation. 

(3.'.)  Ord,  Esq.  v.  Uuspini,  2  Esp.  Cases,  N.  P.  569.  T.  T.  37  Geo.  III. 
(App.  16.)  Assumpsit  on  a  bill  of  exchange  accepted  by  tiie  dellndantj 
v.iiich  was  due  some  time  in  the  year  1784.  Pleas — Xon-assumpsit — Sta- 
tute of  limitation  and  a  set-off.  The  set-off  consisted  of  bills  of  exchange 
and  promissory  notes  of  tiie  plaintiff's,  which  the  defendant  liad  taken  up  oi 
paid  on  his  account :  tliey  were  all  dated  in  the  year  1784.  It  was  objected 
tliat,  m  order  to  entitle  the  defendant  to  go  hito  evidence  respecting  those 
bills  and  notes,  tliey  ought  to  have  been  made  tlie  special  objects  of  a  set-off. 
Lord  K.enyon  overruled  the  oljjection,  and  iield  that  they  were  good  evidence 
under  the  count  for  money  paid  to  the  plaintiff's  use. 

Han»plon  v.  Jarrat,  2  Esp.  Cases,  Ni.  Ihi.  ;)6U.  E.  T.  o7  Geo.  III.  This 
was  an  action  for  goods  sold  and  delivered.  The  defendant  i)leaded  the  gen- 
eral issue,  wilii  notice  of  set-off.  The  set-off  was  in  the  common  lui  iii, 
"  that  tiie  pUdnti IV  was  indebted  to  him  in  a  larger  sum  of  money  than  that 
claimed  by  the  plaintiff,  to  wit,  in  100/.  for  money  had  and  received,  lOO/.  for 
goods  sold  and  delivered,"  going  through  tlie  common  counis  ol  the  decUv- 

G 


42  SET-OFF     BY     STATUTE 


The  notice  of  set-ofF  should  regularly  be  given  at  the  time  of 
pleading  the  general  issue  ;  though,  if  it  be  no^  ihen  given,  the 
court  will  permit  the  defendant  to  withdraw  the  general  issue, 
and  plead  it  again  with  a  notice  of  set-off  :(3^)  and  such  riotice 
may  be  given  after  the  defendant  has  been  ruled  to  abide  bv 
his  plea. (3r) 

As  to  the  pleadings. 
The  plea. 

x\  plea  of  set-off  insisting  upon  a  debt  equal  to  a  greater 
than  tliC  pL.intiff's  need  not  make  an  olFer  to  set-off  the  debts, 
but  may  conclude  as  a  common  plea  in  bar,  with  a  Aerification 
and  prayer  of  jadgment,  Si  actio,   &c.(3.y) 

A  plea  insisting  upon  a  de'ot  v/hich  the  plea  acknowledges 
to  be  less  than  the  plaintiff's  should  conclude  with  a  prayer 
that  the  debt  from  the  plaintiff  may  be  deducted  from  that  ovr- 
ing  by  the  defendant. (Sj.^) 


ration.  That  part  of  the  defendant's  case  upon  -which  he  meant  to  rely  in 
support  of  his  set-o if,  liis  couiisel  proposed  to  make  cut  in  the  following- 
manner.  The  defendant  had  for  a  considerable  time  before  dealt  with  the 
pldintiff;  and  had  paid  him  several  bills  for  articles  furnished  by  tlie  plain- 
tiff, in  the  course  of  his  trade  to  the  defendant  :  these  bills  the  defendant  now- 
pretended  to  have  been  overcharged,  and  liable  to  very  considerable  deduc- 
tion, and  these  overpayments  he  proposed  to  prove  and  to  set-off  against  the 
demand  cLiimed  by  the  plaintiff  in  the  present  action.  This  was  opposed  by 
the  plainaif 's  counsel  on  the  ground  that,  the  accounts  upon  wiiich  these 
payments  had  been  made  having  been  settled,  the  accounts  could  not  now  be 
opened  ;  but  that  if  tliey  couid,  it  should  have  been  made  the  object  of  a 
special  set-off,  and  could  not  be  claimed  under  the  general  notice.  It  w  as 
answered  by  the  defendant's  counsel,  that  this  money  Avas  paid  bvmistake,  and 
would  have  been  recoverable  under  the  general  money  counts,  and  so,  under 
a  similar  clause  in  the  notice  of  set-off,  could  be  given  in  evidence  as  monev 
had  and  received  to  the  party's  use.  Eyre,  Ch.  J.  said,  he  was  of  opinion 
that  It  could  not  be  given  in  evidence  under  the  common  notice  of  set-off. 
It  was  taking  the  plaintiff  by  surpiise,  and  if  the  defendant  meant  to  have 
availed  himself  of  it,  it  should  have  been  the  object  of  a  particular  notice. — 
Iiis  Lordship  t'-'erefore  rejected  it,  and  the  plaintiff  recovered. 

(09)  BlackboUiT.  v.  Ma' -hiis,  2  Str.  1267.  E.  T.  20  Geo.  II.  The  de- 
fendant pleaded  the  general  i-ii.ut,  but  forgot  to  give  notice,  at  the  same  time, 
of  a  set-off.  And  upon  motion  in  time,  the  Court  gave  leave  to  Avithdl•a^v 
the, plea,  in  order  to  delivf-rthe  same  plea  again  with  a  proper  notice  to  set' 
off,  and  s.ud  it  had  been  dohe  so  beibre.     Strange,  pro  defendant. 

(3r)  Cochran,  v.  Robertson,  M.  T.  20  Geo.  III.  B.  R.  ante,  page  40. 

(3s)  Bull.  Ni.  Pri.  179.  Vv  here  the  plea  is  of  an  equal  sura,  there  the 
aetiof)  is  barred  ;  but  if  it  Ije  for  a  less  sum  than  for  ^vhat  the  action  is  brought, 
the  defendant  must  pray  to  have  it  set-off. 


IN    G  E  N  E R  .'W. 


When  either  of  the  debts  accrues  by  reason  of  a  penalty 
contained  in  a  specialty,  the  plea  must  a^•er  v  hat  is  really  due, 
which  averment  is  traversable.  {'3t) 


(3?)  The  words  of  the  statute  arc,  "  in  -which  plea  shall  be  shown  how 
••'  much  is  justly  and  truly  due  on  either  side  :" — S)  mmons  v.  Knox,  3  Term 
Rep.  65.  A.D.  17Si).  (App.  44.)  Debt  on  bond  in  11,619/.     The  defendant 
pleaded,  "  that  there  -was  due  to  the  plaiuiiiV  the  sum  of  5809/.   1  Is.  8f/.  and 
no  more  ;  andlliat  theplaintilV  was  indebted  to  the  defendant  in  more  money 
than  is  remah-.ing  due  to  the  said  plaintiff  by  vh-lue  of  the  said  writing  obliga-« 
tory  ;  and  concluded  with  a  set-off" in  the  common  form."  Tue  plaintiif  replied, 
that  there  \v'as  ayid  vet  isjusli'/  arid  truly   owing  to  the  said  jilaintiff from  the 
said  defendant^  by  virtue  of  the  said  writing  obligatory,  a  larger  aum  of  money 
than  the  said  sum  of  5809/.  1  Is.  %d.  in  the  said  plea  mentioned,  to  wit,  the 
sum  of  6930/.  3s.  9f/.  and  concluding  to  the  country.     To  this  replication 
the  defendant  demurred  ;  and  showed  for  cause,  that  the  plaintiff  attempted 
to  put  in  issue  a   matter  immaterial,  and  therein  traversed  a  fact,  whereon 
no  certain  or  material  issue  could  betaken.     Lord  Kenyon,  Ch.  J.  I  own   I 
form  an  opinion  on  this  subject  with   great   diflfidencj.     This  is  an  action 
brought  on  a  bond,  in  which  case  the  statute  says  that,  if  the  defendant  wisl;- 
es  to  set-OiTa  cross  demand  agiiinst  the  plaintiff  he  must  first  state  in  his  plea 
what  is  really  due  on  the  bond  :  the  defendant  then,  in   this  case,  being 
furnished  with  the  means  of  ascertiuning  the  extent  of  the  demand  upon  the 
bond,  states  that  sucii  a  sum   only  is  due  ;  and  having  thus   complied  with 
the  requisition  of  the  statute,  setS'off  across  demand.     And  the  question  is, 
whether  the  plaintiff  is  bound  to  admit  that  ihat  is  the  extent  of  his  demand. 
Now,  if  he  does  not  deny  it  in  his  replication,  he  admits    it :  it  therefore 
became  necessary  for  the  plaintiif  to  traverse  it ;  for  if  the  pkuntift'were  to  go 
to  triul,  only  on  the   issue,  whether  his  demand  did  or  did  not  exceed  the 
defendant's,  great  injustice  might  be  done.     And  it  seems  to  me  that  there 
is  reason   in  requiring  that  the   exact  sum  should  be  pleaded,  because  the 
purpose  of  pleading  is,  to  reduce  the  matter  to  a  point.     Here  too  the  sum  is 
not  pleaded  under  a  -videlicet ;  and  it  has  been  long  settled  that  where  any 
thing  is  laid  under  a  videlicet,  the  party  is  not  concluded   by  it ;  but  he  is 
where  there  is  no  videlicet.     It  would  therefore  be  very  hard  on  tiiis  plaintiff' 
if  he  were  bound  by  the    sum,  wluch  tl.e  defendant  has  stated  not  under  a 
videlicet,  witliout  having  an  opportunity  of traveisirig  it.     Ashhurst,  J.  Here 
the  defendant  pleaded  that  a  certain  sum  was  du-.-  to  the  phiintifl'on  the  bond, 
and  no  more,  which  would  have  concluded  the  ijlahuilf,  if  he  had  not  travers- 
ed it  in   his  replication.     Crose,  S.  Under  this  act  the  defendant   c;innot 
give  a  notice  of  set-off  with  the  general  issue  ;  l)Ut  he  is  required  to  plead  it 
in  bar,  in  which  plea  he  must  state  what  is  really  due  on  tlie  I)ond.     And  as 
far  as  my   experience  goes,  the  plea  in  this  case  is  warianted  by  the  usual 
form  of  pleading  :  it  has  not  been  usual  to  plead  that  a  huge  sum,  (o  \\\i,  so 
much  is  due,    diU  thai  u  s/iecifir  num  in  due  ami  no  /nor.-.     And  this  uhkIc  is 
certainly   consonant  to  the  8  (ieo.  H.  ch.  21.     There,  as  the  dv.  Iindant  set 
forth  what  was   really  due  without  a  T'/f/rZ/rcY,  the  phiiutilV  woidd  Ik- taken  to 
have  admitted  it,  if  he  had  not  traversed  it  in  lus  replication.    Demurrer 
overruled. 


44  SPT    OIF    BY     STATUTE 


The  different  parts  of  a  pica  of  sei-off"  arc  as  dilTerciit 
counts  in  the  same  declaration. (3i') 

If  part  of  a  jjlea  of  set-off  be  {^ood,  and  the  rest  bad  ;  the 
plaintiff  cannot  demur  generall}^  to  the  whole,  but  must  single 
out  the  exceptionable  p;irt.(3r) 

T/ie  repUcatioii. 

The  general  replication  now  is  "  not  indebted  in  m.anncr  and 
form,"  which  at  once  puts  the  parties  on  the  country;  and  the 
onus  probandi  lies  on  the  defendant. 


Grimwood  v.  Barrit,  6  Term  Rep.  460.  A.  D.  1795.  (App.  54.)  Dcljt 
on  bond  for  1 400/.  conditioned  for  700/.  The  defendant  pleaded  first,  that 
that  there  was  due  from  the  defendant  to  the  plaintiff  on  the  bond  "  a  mucli 
less  sum  than  the  1400/.  to  v.  it,  the  sum  of  735/.  and  no  more,"  and  that 
the  plaintiff,  at  the  time  of  exhibiting  his  bill,  was  indebted  to  h.im  (the  defend- 
ant) in  a  much  larger  sum  of  money,  to  wit,  1200/.  for  goods  sold  and 
delivered,  Sec.  which  he  is  ready  to  set-off.  The  plaintiff  replied,  that  tliere 
was  due  on  the  bond  more  than  735/.  namely,  835/.  0.?.  7c!.  concluding  to 
the  country.  The  defendant  demurred  specially  ;  for  causes  of  demurrer  to 
the  replication,  (he  said)  that  the  plaintiff  had  not  by  his  replication  given  any 
answer  to  the  plea,  nor  adniitted  or  denied  that  the  plaintiff  was  indebted  to 
the  defendant  in  manner  and  form  as  in  the  plea  alleged.  Lord  Kenyon, 
Ch.  J.  Wnere  an  averment  is  material,  the  addition  of  a  videlicet  does  not 
render  it  immaterial.  Grose,  J.  This  plea  being  founded  on  the  8  Geo.  II. 
ch.  24.  s.  5.  it  was  necessary  fortiie  defendant  to  show  how  much  was  due 
on  the  bond  :  he  accordingly  pleaded  that  the  sum  of  705/.  and  no  more,  was 
due,  and  this  was  traversable  according  to  the  case  of  Symmons  v.  Knox, 
supra.  But  it  is  said  that  the  averment  of  the  sum  here  is  laid  under  a 
-videlicet.)  which  was  not  the  casein  Symmons  v.  Knox;  but  the  rule  is,  that 
where  any  thing  in  pleading  is  material,  it  is  not  rendered  less  material  by  its 
being  pleaded  with  a  videlicet :  it  is  still  traversable  ;  and  therefore  this  case 
m\ist  be  governed  by  that  of  Symmons  v.  Knox.  Lawrence,  J.  It  vv'as  neces- 
sary Jor  the  defendant  to  sheiv  the  real  sum  due  on  the  boiid  to  entitle  him  to 
his  set-off:  and  it  was  decided  in  Symmons  v.  Knox,  that  the  averment  of 
that  sum .  was  traversable  ;  the  question  therefore  here  is,  whether  the 
introduction  of  the  videlicet  in  this  case  makes  any  difference  :  but  it  certain- 
ly does  not. 

{ov)  Dowsland  V.  Thompson,  2  Blackst.  910.  C.  P.  T.  T.  13.  Geo.  III. 
This  was  a  plea  of  set-off  tiiat  certain  goods  were  spoiled  on  board  a  ship 
by  the  negligence  of  the  plaintiff,  whereby  he  became  indebted  to  the  defen- 
dant in  10,000/.  and  also  of  a  set-off  of  10,000/.  for  work  and  labour,  money 
had  and  received,  Sec.  To  this  plea  the  plaintiff  demurs,  and  assigns  for 
cause,  that  the  matters  of  damage  above  supposed  in  spoiling  the  goods 
could  not  be  set-off.  Joinder  in  demurrer.  The  Court  (without  entering 
into  the  first  Cjuestion  whether  the  matter  of  damage  could  or  could  not  be 
set-off,)  held  that  the  demurrer  to  the  whole  plea  was  wrong  ;  for  that  the 
latter  part  was  certainly  good  :  and  the  different  parts  are  to  be  considered  as 
diffVirant  counts  in  tJic  same  declaration^ 


IIv     GENERAL.  "      45 


The  plaintiiFmay  reply  the  statute  of  limitations.  (Sec) 

^Vhen  either  of  the  debts  accrues  by  reason  of  a  penalty  con- 
tained in  a  specialty,  the  averment  in  the  plea,  as  to  tiie  sum 
due,  must,  if  necessary,  be  traversed.  (3?/) 

SECTION  IV. 
The  judgment. 

If  the  plaintiff  recov'cr,  judgment  must  be  entered  for  no 
more  than  appears  to  be  truly  and  justly  due  to  him  after  or^e 
debt  is  set  against  the  other.(3r) 

When  the  condition  of  a  specialty  to  which  a  set-off  is 
pleaded,  is  for  the  payment  of  an  annuit}'  or  growing  sum ;  the 
judgment  is  to  be  entered  for  what  is  due,  and  the  penalty 
to  remain  as  a  seeurit}'  against  future  breaches. (4«) 

If  the  defendant,  after  recovering  in  a  cross  action,  bar  the 
plaintiff  by  means  of  a  set-off;  a  remittitur  must  be  entered  on 
the  first  record  for  the  sum  proved  under  the  set-off.(4Z') 


(o.r)  The  plainuft  to  a  ]flea  of  sct-ofTmciy  reply  the  statute  of  limitations. 
Remin:^on  V.  Stevens,  Str.  1271.     \'ide  ante,  note  (2c). 

(3;/)  Vide  ante,  note  (30- 

(3z)  This  is  by  the  express  ^vords  of  the  act,  ante,  note  {v)  page  16. 

(4o)  Collins  V.  Collins,  2  Burr.  820,  A.  D.  1759.  (App.  33.)  This  was  an  ac- 
tion of  delit  on  bond  conditioned,  inter  alia,  to  pay  the  plaintiff  an  annuity. 
To  an  objection  of  counsel,  that  if  the  plaintiff  should  take  his  judgment  up- 
on this  act  of  parliament,  it  would  not  be  ajudgmenf  for  the  pnialty^  but  a 
judgment  'mly  for  the  mim  ducj  and  no  more  ;  and  that  uftu'  the  matter  has 
once  passed  in  rem  judicatum,  the  plaintiff  cannot  aftn-rjarch  recover  any 
more  upon  this  bond,  whatever  may  become  due  by  future  non-payments  ; 
for  that  here  is  7io  jiro-umon  "  that  the  judgment  A/!«//.s'a;?f/«'.  a  s-'curily  Jhrfv- 
lure  fiaymrnts"  as  there  was  in  the  act  of  8  and  9  W.  III.  ch.  1  I.  made  for 
the  better  preventing  frivolous  and  vexatious  suits.  Lord  Mansiield,  in  deli- 
vering the  judgment,  said,  tiiat  the  judgment  is  indeed  by  the  act  of  8  Ceo. 

II.  directed  to  be  entered  "  for  no  more  than  shall  appear  to  be  ju^tly  and  tru- 
ly due  to  the  plaintiH';  but  it  is  clearly  within  the  tvrjycU  and  mean u.t^oilV.c  act, 
that  the  ftmalty  is  to  rniiain  as  a  security  against  future  breaclies,  in  tlis 
case  of  a  Af^-c/,^  pleaded,  as  much  as  it  would  liave  dune  upon  liie  S  anrl  'J  \\', 

III.  ch.  11.  if  /iai/?nc7it  had  been  made  agreeably  lo  llie  directious  llierein 
contained. 

(46)  Bull.  Ni.  Pri.  180.  Baskerville  v.  Brown,  Burr.  1229.  (.\pp.  42.)  Mu- 
tual demands  may  be  sel-oiV  in  this  case,  and  justice  may  be  done  by  cntciiiij; 
it  remittiliu'on  the  first  record  as  to  so  mucli. 


46  SE'i'-OFi-     BY     STATU  IE 


CHAPTER  II. 


OF  SET-OFF  IN  THE  CASES  OF  BANKRUPTS  AND 
INSOLVENT  DEBTORS. 


T/ie  right  to  set-off  under  a  commission  of  hankruptcij  arises 
either  upon  the  particular  statute  of  Set-off  in  the  case  of 
bankruptcy  ;  or  upon  the  general  statute  of  Set-off.  The 
right  to  set-off  in  the  case  of  insolvent  debtors  arises  upon  a 
clause  in  the  insolvent  debtors^  act. 


iwnnAu  jLM-wvia,.  g»r» 


FJJiT  I. 


OF  SET-OFF  BY  THE  PARTICULAR  STATUTE  IN 
THE  CASE  OF  BANKRUPTCY. 

W  HEN  there  are  mutual  debts  or  mutual  credits  between 
the  bankrupt  and  any  other  person,  before  the  bankruptcy^  the 
commissioners  or  the  assignees  must  set  one  demand  against 
the  other  ;  and  the  residue,  upon  the  balance  of  accounts,  is 
the  only  sum  to  be  claimed  or  paid  on  either  side. (4c) 


(4c)  4  Anne,  ch.  17.  s.  11.  And  be  it  further  enacted  by  the  authority 
aforesaid,  that  v/here  there  sliall  appear  to  the  comniisEioners,  or  the  major 
pr.rt  of  them,  that  there  hath  been  mutual  credit  given  between  such  person 
or  persons  against  whom  such  commission  shall  issue  forth,  and  any  person 
or  persons  who  shall  be  debtor  or  debtors  to  any  such  person  or  persons,  and, 
due  proof  thereof  made,  and  that  the  accounts  are  open  and  unbalanced 
tliat  then  it  shall  be  lawful  for  the  said  commissioners,  in  the  said  commis- 
sion named,  or  the  major  part  of  them,  or  the  assignee  or  assignees  of  such 
commission,  to  adjust  the  said  accounts,  and  to  lake  the  balance  cue  in  full 
discliarge  thereof,  and  the  person  debtor  to  such  bankrupt  shall  not  be  com- 
pelled or  obliged  to  pay  more  than  shall  appear  to  be  due  on  such  balance. f 

5  Geo.  II.  ch.  30.  s.  28.  And  be  it  further  enacted  by  the  authority  afore- 
said, that  where  it  shall  appear  to  the  said  commissioners,  or  the  maior  part 
of  them,  that  there  hath  been  mutual  credit  given  by  the  bankrupt  and  any 

•f  This  M'as  a  temporary  act,  ar\<\  is  now  expired :  tiere  is  a  like  provision  in  5  Geo.  I- 
c.  24.  \vl\ich  rs  also  expifeii. 


IN    THE  CASE  OF    BANKRUPTCY. 


This  subject  is  divisible  into  two  parts. 
/.    The  cases  in  xvluch  accounts  may  be  balanced. 
IL   The  modes  of  balancing  them. 
SECTION  I. 
The  cases  in  which  accounts  may  be  balanced. 
Accounts  may  be  balanced  in  the  case  of  bankruptcy,  when 
/.    There  are  mutual  debts  or  credits,  which 
//.  Existed  between  the  parties  before  the  bankruptcy. 
I.  There  must  be  mutual  debts  or  credits,  that  is, 

1.  The  demand  of  the  assignees  and  of  the  creditor  must  be  a. 
debt  or  a  credit ;  and 

2.  The  sum  claimed  must  have  been  due  to  the  bankrupt,  and 
be  due  to  the  creditor  in  their  own  rights  respectively. 

1.    The  demand  must  be  a  debt  or  a  credit. 

The  legal  acceptation  of  the  Avord  debt  has  been  already  ex- 
plained. (4r/) 

The  \vord  credit  is  more  comprehensive  than  the  word 
debt.(4<') 


olher  person,  or  mutual  debts  between  the  bankrupt  and  any  other  person,  at 
any  time  before  such  person  became  bankrupt,  the  said  commissioners,  or 
the  major  part  of  them,  or  the  assignees  of  such  bankrupt's  estate,  sliail 
state  the  account  between  them,  and  one  debt  may  be  set  against  another  : 
and  what  shall  appear  to  be  due  on  either  side,  on  the  balance  of  such  ac- 
count, and  on  setting  such  debts  against  one  another,  and  no  more,  shall  be 
claimed  or  paid  on  cither  side  respectively. 

(W)  Page  18,   19,  8cc. 

(4?)  Lord  Hardwicke,  in  Ex  parte  Dcezc,  1  Atk.  228.  said,  notwithstand- 
ing the  rules  of  law  as  to  bankrupts  reduce  all  creditors  to  an  equality,  yet 
it  is  hard  wliere  a  man  has  a  debt  due  from  a  bankrupt,  and  has  at  the  saii^.c 
time  goods  of  a  bankrupt  in  his  hands,  which  cannot  be  got  from  iiim  with.out 
the  assistance  of  law  or  equity,  that  the  assignees  should  take  them  fixjm  him 
witliout  satisfying  the  whole  debt.  And  therefore  the  clause  in  the  act  of  par- 
liament of  the  5  Geo.  II.  relating  to  nuitual  credit  has  received  a  very  liberal 
construcUon,  and  there  have  been  many  cases  wliicli  that  clause  has  been 
extended  to  where  an  action  of  account  would  not  lie,  nor  could  tlusCouit 
upon  a  bill  decree  an  account.  In  Irench  v.  Icnn,  T.  T.  1783,  (App.  19.) 
Lord  .Mansfield  said,  the  act  of  parliment  is  accurately  drawn  to  avoid  the 
injustice  that  would  l)e  done  if  the  words  were  only  uuilual  debts,  and  i( 
therefore  provides  for  nmtual  credit. 

In  Lanesborough  v.  Jones.  1  P.  \V'.  325.  A.  D.  1716.  the  L<;r(l  Chancellor, 
speaking  of  4  .\iin.  ch.  17.  ».  11.  says,  "  This  clause  in  the  :itat\itc  was  not 
to  be  construed  of  dealings  in  trade  only,  or  in  oilsc  of  nuitual  rtiniiing\ic- 
counts  :  Ijut  that  it  was  natural  justice  and  (.(luiiv,  tiial,  in  nil  ruses  of  nuitiml 
credit,  only  the  lialancc  should  l)e  paid." 


48  SET-OfF     BY    STATUTE 


It  seems  that  any  equitable  demand  is  a  credit. (4^) 
It  has  been  decided  that  a  legacy  due  from  a  testator  who 
admits  assets  may  be  set-off. (4/*) 

It  has  been  decided  that  a  party  to  a  contract  on  \vhich  he 
has  taken  usurious  interest,  may  set-off  the  sum  really  advan- 
ced on  the  contract. (4^^) 


In  Atkinson  v.  Elliot,  7  T.  R.  378.  A.  D.  1707.  (App.  52.)  Lord  Kenyon 
says,  "  The  statute  5  Geo.  II.  ch.20.  s.  28.  enacts  that,  where  there  are  mu* 
tiuil  credits  or  mutual  debts  between  the  bankrupt  and  any  other  persons,  one 
debt  may  be  set-oti"  against  another,  and  only  the  balance  claimed.  Now,  in 
using  these  words,  t'le  Legislature  must  have  intended  something  more  than 
would  have  been  expressed  by  mutual  debts  only,  and  tlie  decisions  referred 
to,  show  that  this  construction  has  been  put  upon  this  act. 

I  collect  this  from  the  two  following  notes,  and  from  the  case  of  Jeffs  v. 
Wood,  which,  though  in  some  respects  it  may,  possibly,  be  doubted,  has  a 
tendency  to  establish  this  point :  which,  1  am  aware,  is,  perhaps  too  general. 

(4/-)  Jeffs  V.Wood,  2  P.  W.  !28.  A.  D.  1723.'  The  defendant  was  in- 
debted to  the  flither  of  the  plairiiiff ;  and,  after  the  death  of  the  father,  be- 
came indebted  to  tiie  plaintiff,  the  son.  The  father,  by  his  will,  gave  500/. 
to  the  defendant,  and  appointed  the  plaintiff  his  executor.  The  defendant 
sued  the  plaintiff  in  the  Spiriiual  Coiiitfor  the  500/.  The  plaintiff  brought 
his  bill  against  the  defendant,  and,  he  becoming  u  bankrupt,  against  the  as- 
signees under  the  commission,  for  an  allowance  to  be  made  him  out  of  the 
legacy,  for  tne  money  v;hich  the  bankrupt,  the  legatee,  owed  to  thd  testator, 
and  likewise  to  the  plaintiff:- — there  was  a  cross-bill  by  the  assignees  for  the 
legacy.  The  Master  of  the  Rolls  observing  that  the  assignees  cculd  not 
stand  in  a  better  situation  than  the  bankrupt  stood  previous  to  his  bankrupt- 
cy, who  Avould  net  have  been  able  to  recover  the  legacy  v/ithout  deducting 
what  v/as  due  to  the  executor,  said — It  was  objected  that  this  demand  of  the 
defendant  Wood,  or  of  the  assignees,  was  not  a  debt,  but  a  legacy  ;  and  a 
matter  demandable  in  the  Spiritual  Court  where  it  was  sued  for,  till  such 
suit  was  stopped  by  injunction  :  and  that  the  statutes  of  bankrupts  mention 
only  dt^bis  due  from,  and  to,  the  bankrupt ;  but  to  this  it  was  answered  and 
resolved,  that  a  legacy  due  from  an  executor  who  admits  assetts  (as  in  the 
present  case,)  is  in  equity  a  debt  due  from  such  executor,  and  an  equitable 
demand  is  a  debt  within  the  statutes  of  bankrupts  ;  but  vide  Parish  v.  Wil- 
son, 31  Geo.  III.  Pcake  73.  Decks  v.  Strutt,  A.  D.  1794.  5  T.  R.  690. 

(4^)  Ryall,  assignee  of  Harvest,  v.  Rowls,  executor  of  Stevens,  I  Yez. 
sen.  375.  A.  D.  1750.  A  sum  v/as  reported  to  be  dv.t  to  Rowls  as  executor 
from  Ryall  as  assignee ;  the  assignees  attempted  to  set-off  2000/.  due  from 
Stevens  upon  a  contract  in  which  he  had  taken  exorbitant  and  usurious  iuter- 
est.  The  question  wasji  whether  the  assignees  should  have  the  2000/.  as  a 
distinct  independent  demand,  or  Avhether  Rov/ls  should  be  permitted  to  set- 
off. Lorvl  Chancellor.  The  defendants  insist  on  a  reasonable  rule  ;  the  bank- 
rupt and  his  assignees  were  certainly  entitled  to  have  the  beneht  of  tiiis  2000/. 
v.itli  interest  from  liie  time  it  ought  to  be  paid.  But,  as  to  the  general  ques- 
tion whether  this  case  is  within  the  act  for  mutual  credit,  I  am  of  opinion  it 


ly   THE   CASE  OF   BANKRUPTCY.  49 


The  holder  of  a  bill  of  exchange  \vho  obtains  possession  of 
it,  after  acceptance,  in  the  course  of  its  iiegociation,  credits  the 
accc])tor,  and  may  set-off  the  demand  arising-  upon  it  against 
an}'  debt  or  a-edit  claimed  from  him  by  the  assignees  of  the  ac- 
ceptor. (4y^) 

In  an  action  by  the  assignees  of  a  bankrupt  for  damages  for 
the  breach  of  a  special  agreement;  the  defendant  cannot  avail 
himself  of  a  notice  of  set-off",  unless  the  assignees  are  obliged  to 
have  recoiu'se  to  the  common  counts.  (4?) 

It  has  been  decided  that  if  any  person  ha\'e  goods  of  the 
bankrupt's  entrusted  to  liim  in  the  course  of  his  trade  or  oc- 
cupation ;  he  cannot,  solely  on  account  of  such  trust,  set-off 
against  a  demand  for  these  goods  any  sum  beyond  that  for 
which  he  has  a  lien.(4A-) 


is  :  and  that  there  is  no  distinction  taken,  on  what  consideration  it  is  that  the 
debt  ought  to  be  set-off,  has  arisen.  There  arc  several  cases,  where  de- 
mands have  been  set-off  against  one  another,  that  could  not  have  been 
brought  into  the  general  account,  if  there  had  not  been  a  bankruptcy  ;  but 
■wherever  the  Court  has  found  a  demand  on  one  side  or  the  other,  the  Court 
has  always  endeavoured,  that  one  should  be  set  against  the  other,  which  is 
founded  on  the  act,  "  that  where  there  arc  mutual  debts,  b:c." — This  is  a 
debt  due  from  Stevens  to  Harvest :  a  debt  in  equity,  though  possibly  no  re- 
medy at  law,  because  the  law  admits  not  the  party  to  an  usurious  contract  to 
have  a  remedy. 

(4/i)  Hankey  and  others,  assignees,  v.  Smith,  3  T.  R.  50".  A.  1).  1789. 
(App.  46.)  Assumpsit  for  goods  sold  and  delivered.  Set-off.  Verdict  for 
the  plaintiffs  subject  to  the  opinion  of  the  Court  on  a  case  which  stated  that 
the  defendant,  before  the  bankruptcy,  discounted  for  one  Towgood  a  bill  ac- 
cepted by  the  bankrupt,  which  bill  became  due  a  few  days  before  the  bank- 
i-uptcy  ;  and  that,  at  the  time  when  the  bill  was  discounted  for  'I'owgood,  he 
did  not  indorse  the  same,  but,  by  a  memorandum  in  writing,  agreed  to  in- 
dorse when  he  should  be  thereunto  required  :  that  he  did  indorse  it  after  the 
bankrupt  had  stopped  paymtnt ;  and  tiiat  the  reason  why  tlie  bill  vas  not 
indorsed,  was,  that,  if  the  Ijaiikrupts  had  stood  their  ground,  it  might  be 
presented  for  payment  without  the  indorsement  of  Tow  good  and  Co.  as  he, 
Towgood,  wis!:td  that  their  names  sliould  not  appear.  The  (juestion  was, 
X\hethcr  the  defendant  could  s.t-off  this  bill  against  a  demand  upon  him  for 
goods  sold.  Sec.  Lord  Kenyon  Sidd,  that  taking  this  bill  ronslituted  a  cre- 
dit. And  per  Huller,  J.  in  order  to  constitute  mutual  credit,  it  is  not  neces- 
sary that  the  pailies  mean  to  trust  each  othei-  in  that  transaction  ;  for,  if 
a  bill  of  exchange,  which  is  accepted,  be  sent  out  into  the  world,  credit  isgivcii 
tuthc  acceptor  by  every  person  who  lakes  the  bill. 

(4/)  Colson  uikI  other.';,  assignees  of  Hunter,  v.  Welsh,  I  Esp.  Cas.  378, 
A.  D.  1793.  ante,  p;ige  I 'J. 

(4/C)  Lx  parte  Decze,  I  Alk.  228.  A.  D.  1718.     A  merchant  boriowtd  of 

H 


50  SET-OFF    BY    STATUTE 


A  creditor,  who  has  bills  of  exchange  entrusted  to  him  by  a 
trader,  for  the  purpose  of  appropriating  them  to  the  payment 
of  particular  debts  and  then  to  return  the  residue  to  the  trader, 
may,  upon  the  bankruptcy  of  the  trader,  set-ofF  any   debt  or 


the  petitioner,  uho  was  a  packer,  the  sum  of  500/.  on  note  :  to  whom  the 
merchant  afterwartls  sent  six  bales  of  cloth  to  pack  and  press.  At  the  time 
of  the  bankniptcy  of  the  merchant  part  of  the  500/.  h.ad  been  paid ;  and 
tlierc  was  19/.  due  to  IIk;  petitioner  forthe  packing  and  pressing  these  bales; 
and  there  was  due  from  the  petitioner  to  the  merchant  near  1 9/.  for  wine  :  but 
there  were  no  goods  in  the  liands  oftlie  petitioner  when  first  he  lent  the  mo- 
ney, nor  had  there  been  dealings  bct'.veen  them  for  many  years.  It  r.ppear- 
ed  in  evidence  that  it  was  usual  for  packers  to  lend  money  to  clothiers,  and 
the  cloths  to  be  a  pledge,  not  only  for  the  v/ork  done  in  packing,  but  for  the 
loan  of  money  likewise.  (Vide  Ex  parte  Ockenden,  A.  D.  1754.  1  Atk. 
235.) — upon  a. question,  (inter  al.)  Avhether  there  was  mutual  credit,  and 
how  far  it  extended. 

The  Lord  Chancellor.  It  is  very  hard  to  say  mutual  credit  should  be  con- 
fined to  pecuniary  demands  ;  and  that,  if  a  man  has  goods  in  his  hands  be- 
longing to  ii  debtor  of  his,  which  cannot  be  got  fi'om  him  without  an  action 
or  bill  in  equity,  that  it  should  not  be  considered  as  mutual  credit :  and  Lord 
Cowper's  opinion  (in  2  Vern.  6D 1.)  plainly  favours  that  construction. 

And  here,  though,  if  there  had  been  no  bankruptcy,  in  an  action  for  these 
goods,  the  debt  could  not  have  been  set-off  ;  yet,  as  the  clause  of  mutual  cre- 
dit has  been  extended,  I  think  it  may  come  within  that  rule,  especially  as 
here  is  an  account  between  them,  on  the  one  side  19/.  due  for  packing  &c. 
on  the  other  side,  much  about  the  same  sum  due  to  the  bankrupt's  estate  for 
wine. 

Ex  parte  Ockenden,  1  Atk.  235.  A.  D.  1754.  A  flour-factor  entrusted 
some  corn  with  a  miller  to  grind.  The  flour-factor  became  a  bankrupt ; 
being  indebted  to  the  miller  for  the  price  of  grinding  the  corn  ;  and,  on  a 
general  balance,  for  other  corn  wliich  he  had  ground.  The  miller  was 
in  possession  of  the  corn  at  the  time  of  the  bankruptcy,  and  had  trusted  the 
flour-factor  on  the  general  balance  upon  the  supposition  that  he  had  always  a 
lien  for  his  whole  debt.  Upon  a  question  whether  the  coni  was  a  security 
for  the  general  balance, 

Lord  Chancellor.  In  Ex  parte  Deeze  before  me,  there  was  evidence  that 
it  is  usual  for  packers  to  lend  money  to  clothiers,  and  the  cloths  to  be  a 
pledge  not  only  fur  the  work  done  in  packing,  but  for  the  loan  of  money 
likewise.  Then  it  must  come  to  the  question  upon  the  clause  in  the  act  re- 
lating to  mutual  credit,  and  I  omii  I  am  extremely  doubtful  as  to  that.  Plere 
is  a  quantity  of  corn  delivered  from  time  to  time  by  a  mealman  to  a  miller. 
Tiie  kiw  gives  a  lien  pro  tanto  as  is  due  to  tiie  miller  for  grinding  the  corn, 
£ind  no  contract  appears,  in  this  case,  to  extend  it  further ;  and  I  must  pre- 
sume therefore  it  a\  as  not  intended  to  be  carried  further.  The  clause  in  the 
act  of  5  Geo.  II.  relating  to  mutual  credit  has  been  carried,  to  be  sure,  fur- 
ther, and  rigi:t:ully,  than  a  mere  matter  of  account ;  but  I  do  not  know  that 
»  court  of  equity  has  gone  further  than  courts  of  law  in  the  cases  of  a  set-ofi". 


IX     THE    CASE    OF     BAXKRUPTCV.  51 


credit    due    to    liim   from   the  bankrupt  against    a  demand 
upon  him  by  the  assignees,  for  the  residue. (4/) 

II.  To  constitute  mutuahty  of  debts  or  of  credits,  it  is  also 
necessary,  M(7/'  the  sum  claimed  rcas  due  to  the  bankrupt  and  is 
due  to  the  creditor  in  their  oxvu  rights  respectivelij.{Am) 


These  cases  go  farther  indeed  tlian  cases  of  accounts,  but  can  any  case  be 
put  where,  in  the  present  uistance,  there  could  have  been  a  set-oft'.  The 
case  stood  over  till  the  20th  of  August,  (\'ide  Green  v.  l-\u-mer,  1  Blackst. 
653.)  when  his  Lordship  determined  that  tlie  corn  was  not  a  security  for  the 
general  balance. 

Wilkins  V.  Carmicheal,  Uoug.  101.  A.  D.  1779.  In  an  action  of  trover 
brought  by  the  assignees  of  a  bankrupt  for  a  ship  of  the  bankrupt's  against 
the  captain  who  claimed  a  Uen  upon  it  for  wages,  stores  and  i)rovisions,  for 
which  he  was  liable  before  the  bankruptcy  of  tb.e  owner,  and  had  paid  after 
the  bankruptcy.  Lord  iSIansfield.  If  there  is  no  lien,  can  there  be  a  set- 
off ?  This  is  no  item  of  any  sort  in  account  between  the  bankrupt  and 
the  defendant ;  the  ship  remained  in  specie  till  after  the  bankruptcy  :  and  the 
conversion  arises  from  an  act  done  in  the  specilic  property  of  the  assignees, 
not  of  the  bankrupt. 

(40  Atkinson  v.  Elliot,  7  T.  R.  378.  A.  D.  1797.  (App.  52.)  In  an  ac- 
tion of  assumpsit  a  case  was  reserved,  from  which  it  appeared  that  the  de- 
fendant, on  the  3d  of  May,  1796,  drew  at  six  months  date  en  Hodges,  the 
bankrupt  for  430/.  and  on  the  6th  of  November,  at  six  months  date,  for  230/. 
The  bills  were  accepted,  and  were  for  value  received.  On  the  6th  of  No- 
vember, when  the  first  bill  became  due, the  bankrtipt  \\as  not  able  to  pay  it ; 
l^ut  on  the  9tli  of  the  same  month  he  gave  the  defendants  a  bill  of  \\'aipole 
and  Co.  for  100/.  due  on  the  1 1th  of  December  following,  and  on  the  10th  of 
November  gave  the  defendants  a  bill  accepted  by  Bullock  and  Son  for  300/. 
due  also  on  the  1 1th  of  December.  At  the  time  of  giving  this  last  bill  the 
defendants  gave  the  bankrupt  the  following  memorandvun  :  "  Memorandum. 
I  promise  to  pay  to  Mr.  II.  Hodges  170/.  when  his  bill  on  Messrs.  Bullock 
and  Son  is  paid."  It  was  not  in  the  contemplation  of  either  party  to  do  more 
than  take  up  the  first  bill  for  430/.  The  bills  for  100/.  and  for  500/.  were  duly 
paid  on  the  1  Ita  of  December.  On  the  13th  of  December,  the  commission 
of  bankruptcy  issued  against  Hodges. 

The  Court  was  clearly  of  opinion  that  the  defendant  was  entitled  to  set-ofl' 
the  170/.  agauist  the  second  bill  for  270/.  drawn  by  theni  on  the  bankrupt,  ami 
not  due  till  the  9th  of  March.  Postea,  to  defendants.  Vide  note  (r)  page 
19. 

(4;/0  ^'illc  page  23,  where  many  of  the  cases  respecting  ihc  nature  of 
deljtsflue  in  the  rights  r,f  the  rcsficctive  fiartirti  will  appear  to  have  originated 
inbankrupt<-y.  They  are  arranged  in  the  former  part  of  the  work,  because 
their  operation  is  not  confined  to  Sct-'jJJ'in  the  caxc  o/baiikni/itnj,  but  cMcnds 
to  "  Scl-'jff'in  gcnrral."  But  see  the  decisions  in  the  case  of  Set-ofl"  in  Kijuily 
(postea)  where  this  doctrine,  in  the  case  of  partners,  sccnis  to  be  a  little 
shaken;  unless  those  cases  stand  on  equital)le  piinciplcs,  v.ithout  any  rela- 
tion to  the  statute  of  Set-off.  N.  B.  Melionicchi  v.  Exchange  Assurance, 
ante  28,  and  ail  the  cases  to  pajjes  31  and  ."*'.  aie  cases  in  bankruptcy. 


B2  SEl-OFl'     BY     STATUTE 


2.  The  next  requisite  to  enable  the  parties  to  balance  at> 
CO  ints  in  the  case  of  bankruptcy  is,  "  t/mt  the  debt  or  cj'edit 
exist  between  the  parties  before  the  bankruptcy. {J±n) 

The  c  i^es  on  this  head  are  divisible  into  two  chisscs. 

1  ^t.  Whether  the  debt  or  credit  existed  before  the  bankrupt- 
cy ;    2dly.    Whether  the  debt  or  credit  existed  between  the 
parties  before  the  bankT*iiptc}'. 
As  to  the  existence  oftJie  debt  or  credit  before  the  bankruptcy. 

A  demand  arising  upon  an  instrument  payable  after  tho 
bankruptcy,  cannot  be  set-ofl';  unless  it  is  payable  at  all  events, 
on  a  day  certain. (4o) 


(4'7)  The  words  of  the  statute  are:  "When  there  hath  been  mutual, 
Sec.  between  the  bankrupt  and  any  otiier  person  at  any  time  before  such  per- 
son became  bankrupt,"  &c.  Vide  note  (Ac)  page  46. 

(4o)  The  cases  on  this  head  are  of  two  classes. 

Int.  liliere  the  instrument  is  payable,  at  all  ez'e?its,  on  a  day  certain  after 
the  bankrufitcy. 

2dly.  IVhere  the  payment  after  the  bankruptcy  is  uncertain,  either  as  to  the 
time  or  as  to  the  erent. 

1st.  Where  the  instrument  is  payable,  at  all  events,  on  a  day  certain  after  the 
bankruptcy. 

Ex  parte  Prescott,  1  Atk.  231.  A.  D.  1753.  A  creditor  for  110/.  and  a 
debtor  upon  bond  given  to  the  bankrupt  for  340/.  payable  on  the  4th  of  March, 
1756,  witii  interest,  petitioned  that  the  1 10/.  might  be  set-off  against  the  debt  of 
340/.  Lord  Chancellor  ordered  that,  upon  the  petitioner's  agreeing  to  pay  the 
balance  forthwith  to  the  assignees,  which  the  act  of  parliament  (alluding  to  7 
Geo.  I.  relating  to  creditors  Wiiere  debts  are  payable  at  a  future  day,)  requires, 
the  balance  only  sliould  be  ptdd. 

Smith  V.  Hodson,  4  Term  Rep.  211.  A.  D.  1791.  (Appen.  49.)  The  de- 
fendant accepted  a  bill  for  442/.  drawn  bv  the  bankrupt  on  the  4th  of  March, 
1788,  and  payable  on  the  7th  of  May,  1788.  The  bill  was  for  42/.  for  a  va- 
luable consideration,  and  400/.  for  the  accommodation  of  the;  bankrupt.  The 
bankruptcy  happened  on  the  29th  of  April,  1788.  The  Court,  upon  a  ver- 
dict for  t;ie  plaintiff,  on  a  special  case,  were  of  opinion  that  the  defendant 
was  entitled  to  set-off  his  demand  upon  this  bill,  and  ordered  a  nonsuit  to  be 
entered. 

Atkinson  V.  Elliot,  7  T.  R.  371.  A.  D.  1797.  (App.  52.)  Assumpsit  and 
case  reserved.  On  the  6th  of  Septemlier,  1796,  the  bankrupts  accepted  a 
bill  of  tlie  defendant's  at  sis  months  date,  for  230/.  for  goods  sold  to  the 
bankrupt  s by  the  defendant.  On  the  13th  of  December,  1796,  the  bank- 
ruptcy happened.  In  an  action  commenced  on  the  12th  of  February,  1797, 
by  the  piaintifts  against  the  defendant,  the  defendant  insisted  upon  his  right 
to  set-otf  til',  a  )ovebill  for  230/.  thoughit  was  notdue  till  the  9th  of  March  1797. 

l^ord  Kenyon.  In  my  opinion,  the  case  Ex  parte  Prescott  was  properly 
decided)   and  tnat  has  since  been    followed  by  a  series  of  determiuat'on«. 


jy     THE     CASE     OF     BANKRUrXCY.  53 


If  the  demand  depend  upon  a  contingency,  but  is  secured  hv 


Lawrence,  J.  This  is  direcllj'  witliin  the  autliovity  of  the  case.  Ex  parte 
Prescott.     Postea  to  the  defendant. 

2dly.  Where  the  payment  after  the  bankriiptc]}  is  imcertain^  either  as  to  the 
time,  or  afi  to  the  event. 

Ex  parte  Groome,  1  Atk.  115.  A.  D.  1744.  On  articles  previous  to  the 
marriage  of  the  petitioner,  the  husband  covenants  to  leave  his  wife  600/.  on 
the  contingency  of  survivintj  him  :  a  cominission  of  bankruptcy  is  taken 
out  against  the  husband,  who  dies  before  any  dividend  is  made.  The  peti- 
tioner applied  to  be  admitted  a  creditor  for  the  600/  ;  but  the  petition  was 
dismissed,  the  Chancellor  observing  tliat there  was  no  such  thing  as  drav.ing 
a  line  between  the  contingency  not  happenuig  before  the  bankruptcy,  and  yet 
happening  before  the  time  of  the  distribution. 

Hancock  v.  Entwissle,  3  Term  Pvcp.  435.  A.  D.  1789.     (App.  47.)     In 
an  action  on  a  bill  of  exchange,  the  plaintilTs  having  proved  their  case,  the 
only  question  was,  whether  the   defendants  were  entitled  to  a  set-ofl",  arising 
from  an  agreement  made  in  March  1788,  between  the  defendants  of  one  part, 
and  the  bankrupt  of  tlie  otiier,  by  which,  (after  reciting  that  a  loss  had  Ix-en 
sustained  by  the  defendants,  in  consequence  of  the  purchase  of  some  cotton, 
by  the  bankrupt  as  their  broker,  for  reimbursing  which  they  made  a  claim 
on  him.)  in  order  to  put  an  end  to  all    controversy,  it  was  agreed  tliat  the 
loss,  though  exceeding  1900/.  should  be  fixed  at  that  sum  and  no  more  ;and 
that,  in  payment  or  s..tisfaction  of  that  sum,  the  bankrupt  slioukl,  from  lime 
to  time,  witiiin   the  space  of  four  years,  recommend  parcels  of  cotton,  not 
exceeding  130  bags  at  onetime,  to  tlie  defendtints  for  their  purchase,  and  that 
the    defendants   should  purciiase  them,  paying  for  them  in  notes  at  three 
months  date,     jind  the  bankrujit  undertook  that  the  clear  jirofits  on  such  .'.a/t-.s- 
should,  in  the  course  of  fjiir  years^  be  sufficient  to  discha-ge  the  1900/.    but  if 
the  8a:ne  should  not  be  fmid  wiihin  that  time,  then  the  bankiiifit  agreed,  immr- 
diatelij  after  the  exliirationoffuur  years,  in  case  he  should  then  be  living,  to  fiay 
them  the   difference.     And   if  tiie    purchases  should  occasion   a  loss    to  the 
defendants,  the  bankrupt  undertook  to  make  good  such  loss.     Loid  Kenyon, 
before  wiiom  the  cause  was  tried,  being  of  opinion  that  the  defendants  were 
not  entitled  to  set-off,  the  pLiiitilf  obtained  a  verdict.     And  upon  a  motion 
for  anew  trial,  Lord  Kenyon,  Cli.  J.  said,  if  this  deed  had  never  lieen  enter- 
ed into,  t:ie  claim  which     the  defendants   had  on  liie  bankrupt  could  not 
have  been  set-uff  in  this  action,  because  it   rested  merely   in   damages  ;  it 
arose  from  the  misconduct  of  the  I>unkrupt,  and  migiit  iiave  been  settli-d  in 
an  action.     But  l)y  tlis  deed  the  damages   are  li(|uidated,  and  the  parties 
agreed  on  cert.iin  tilings  to  l)e  done  in  the  course  of  lour  years,  as  the  means  of 
making  a  recompense  to  tlie  defendants,  to  the  amount  of  that  simi.     If  a 
ceitain  sum  of  money  had  been  payable  at  all  events  by  instalments,  and  one 
of  the  payments   had  become  due  b?iorc  tiie  bankru|)t(y,  tlie   whole  might 
have  been  proved  under  t'le  con)mission.  Hut  it  isclearlliat  Ihebanknipl  was 
not  discharged  by  his  bankruptcy,  from  the  operation  of  this  deed  ;  for  when 
he  obtains  his  certificate,  he  may  be  enabled  to  perform  the  stipulations  con- 
tained in  it.     Tiien,  if  he  were  not  disciiarged  from  his  covenants  by  his  cer- 
tificate, this  debt  could  not  be  proved  under  the  commission,  nor  can^it  be 


54  S£T-Ori'    BY    STATU'lJ' 


a  penalty  which  is  forfeited  at  law  before  the  bankruptcy,  it 
may  be  set-ofr.(4/)) 

If  the  payment  depend  upon  the  sur^  ivorship  of  two  persons 
who  are  aUve  at  the  bankruptcy,  it  cannot  be  set  off. (4^) 

It  seems  tliat  an  instrument  of  indenmity  given  by  a  princi- 
pal to  a  surety,  and  priyable  after  the  bankruptcy  of  the  princi- 


set-ofT,  for  it  had  no  existence  as  a  debt  at  the  time  of  the  bankruptcy.  The 
distinction  has  been  -well  settled  in  a  variety  of  cases,  as  in  those  of  Ex  parte 
Groome,  and  Ex  parte  Winchester,  that  if  the  demand  be  payable  at  all 
events,  though  at  a  future  day,  it  may  be  proved  under  the  commission  ;  but 
where  it  depends  on  a  contine;ency,  whether  it  will  be  paid  or  not,  it  cannot 
be  proved  unless  it  be  secured  by  a  penalty  which  is  forfeited  at  law,  in  which 
case  the  Court  will  take  hold  of  the  legal  right  to  give  the  party  a  remedy 
under  the  commission.  But  in  tliis  case  tliere  v.as  no  legal  demand  at  the 
time  of  the  bankruptcy.  And  the  rule  was  discharged. 

Dobson,  assignees,  v.  Lockhart,  5  Term  Rep.  133.  A.D.  1793.  (App.  1.) 
Assumpsit  for  goods  sold.     Set-ofT,  of  a  bond  on  the  following  facts. 

On  the  11th  of  October,  178S,  the  bankrupt  and  the  defendant  became 
bound  to  A.  and  B.  in  900/.  conditioned  to  pay  450/.  and  interest  on  demand. 

On  the  16th  of  May,  1789,  the  bankrupt,  one  Foster,  and  the  defendant, 
became  bound  toC.  D.  and  E.  in  1000/.  conditioned  to  pay  500/.  and  inter- 
est, on  the  1st  of  June,  1789.  These  two  bonds  were  executed  by  the  de- 
fendant, as  a  surety  for  the  bankrupt  and  for  his  debt  only. 

On  the  21st  of  May,  1789,  to  indemnify  the  defendant  against  these  bonds, 
the  bankrupt  became  bound  to  the  defendant  and  G.  Lockhart  (who  was  only 
trustee  for  the  defendant)  in  1400/.  conditioned  to  pay  700/,  on  the  13th  of 
February,   1790. 

Afterwards,  and  after  the  bankruptcy  of  the  principal,  viz.  on  the  14tb  of 
December,  1789,  the  defendant  vuis  obliged  to  pay  470/.  to  A.  and  B.  on  the 
first  bond,  and  236/.  17s.  to  C.  D.  and  E.  on  the  second  bond.  Plaintiffs 
nonsuited,  with  liberty  to  apply  to  the  Court  to  enter  up  a  verdict,  if  the 
Court  should  be  of  opinion  that  they  were  entided  to  recover.  The  judgment 
of  nonsuit  was  afFivmed  on  the  general  issue,  but  part  of  the  judgment  of 
BuUer,  J.  may  be  applicable  to  this  plea.  He  says,  I  agree  with  the  plain- 
tiff's  counsel  that  thei'e  is  no  case  in  which  it  has  been  held  that,  where  it 
depends  on  some  future  event  which  does  not  take  place  until  after  the  bank- 
ruptcy, whether  or  not  there  will  be  any  debt  against  the  bankrupt,  the  debt 
can  either  be  proved  under  the  commission,  or  set-off  against  a  demand 
made  by  the  assignees.' — N.  B.  It  does  not  appear  in  this  case,  at  what  time 
the  bankruptcy  happened  ;  but  it  seems  to  have  been  between  the  21st  May, 
1789,  and  the  14th  December,  1789.  Vide  Drinkwater  v.  Goodwin,  Cowp. 
251.  and  Cowper  v.  Birch,  6  T.  R.  28. — Where  a  liability  to  pay  before  the 
bankruptcy,  though  no  payment  be  made  till  after  the  bankruptcy,  is  suf- 
ficient to  entitle  a  person  to  a  lien. 

(1/0  D.  Lord  Kenyon  in  Hancock  v.  Entwissle,  3  T.  R.  435.  in  the  last 
note. 

{4(j)  Ex  parte  Groome,  I  Atk.  13  5.  note  (4o). 


IN    THE    CASE    OF    BANKRUPTCY.  55 


pal,  may  be  set-off :  if  the  suret}-  be  liable  to  pay,  before  the 
bankruptcy,  though  no  payment  is  made  by  him  till  after  the 
bankruptcy. (4;-) 

The  debt  cannot  be  set-off,  though  the  event  be  determined 
after  the  bankruptcy,  and  before  the  dividend  is  made.  (4^  ) 

If  a  loss  happen  upon  a  polic}"  of  insurance  before  the  bank- 
ruptcy of  a  principal  who  has  entrusted  the  broker  with  the 
policy  ;  the  broker  may  set-off  any  debtor  credit  due  to  him, 
to  a  demand  upon  him  by  the  assignees  for  the  amount  of  the 
losses  which  he  receives  from  the  undenvriters  after  the  bank- 
ruptcy. (4?') 

If  a  purchase  be  made  on  speculation  by  three  persons  before 
the  time  when  one  of  them  becomes  a  bankrupt ;  and  if,  after 
such  bankruptcy,  the  speculation  be  carried  into  effect  by  those 
'v\ho  continue  soh'ent,  and  it  turn  out  beneficial,  the  amount  of 
the  produce  may  be  set-off  to  any  demand  due  from  either  of 
the  solvents  to  the  bankrupt  before  the  bankruptcy. (4i;) 

As  to  tJie  existence  of  the  debt  or  credit  between  the  parties 
before  the  bankruptcy. 

A  bill  of  exchange  taken  up  and  paid,  after  the  bankruptcy 


(4r)  Dobson  v.  Lockhart,  5  T.  R.  133.  note  (4o).  Vide  2  T.  R.  100,  and 
Ex  paite  Cocksliott,  Cooke's  Bank.  Laws.   149. 

(4s)  Ex  parte  Groomc,  note  (4c/). 

(40  Whitehead  v.  Vaughan,  T.  T.  25  Geo.  III.  B.  R.  Cooke's  Bank. 
Laws,  579.  Mitford  put  a  poHcy^  of  insurance  into  the  liands  of  Vaughan 
his  broker,  that  he  might  get  it  underwritten,  whicli  was  done  on  the  3(1 
May,  1781,  by  diflerent  persons,  \'auglianl)einghiniself  one.  In  May,  1784, 
a  loss  happened  ;  but,  being  an  average  loss,  the  actual  sum  due  from  the 
underwriters  on  the  policy  was  not  licjuidated  lUid  ascertained  till  a  time  sulv 
sequent  to  the  bankruptcy  of  Mitford,  which  Avas  in  July,  1784.  The  as- 
signees demanded  tlie  average  loss  received  by  the  defendant,  but,  by  sct- 
tlng-ofl'  what  he  had  received  in  the  general  account  with  the  iianknipt,  the 
balance  was  108/.  5.v.  6^/.  which  the  defendant  paid  into  Court.  Upon  acjueslion 
whether  tiie  defendant  was  entitled  to  insist  upon  this  set-ofl',  it  v.as  argued 
for  the  plainlifT,  that  the  debt  became  due  from  the  defendant  upon  the  re 
ceipt  of  tlie  average  loss,  vliich  was  after  tlie  bankruptcy,  and  therefore 
could  not  besct-c^n".  Mr.  J.  Buller  said,  the  plaiiitilV  was  wrong  every  way  : 
1st.  The  bankrupt  had  a  good  cause  of  action  before  the  bankruptcy,  foi 
this  debt  was  due  before  the  bankruptcy,  though  not  ascertained  ;  2dly.  The 
statute  5  Geo.  II.  c.  30.  is  decisive  ;  lor,  by  tliat  statute,  the  balance  only 
is  the  debt.  The  assignees  are  to  take  the  account,  ajul  nothing  i-  inri^.d 
to  their  use  but  the  balance. 

(4x;)  Ante,  page  25,  and  Appendix  19 


56  SET-OFF    BY    STATUTE 


oi'the  acceptor,  by  anindorser,  cannot  be  set-oft' by  him  under 
a  commission  against  the  acceptor.(4.T) 

A  note  indorsed  to  the  claimant  after  the  bankruptc}^  cannot 
be  set  off.  (4?/) 

It  is  incumbent  upon  an  indorsee  to  show  that  the  indorse- 
ment was  made  before  the  bankruptcy  :  but  the  possession  b\' 
the  payee  of  a  note  made  before  the  bankruptcy  seems  to  be 
reasonable  evidence  that  it  came  into  his  possession  at  the  time 
it  bears  date.  (4?/) 

SECTION  II. 
The  mode  of  balancing  the  accounts. 

The  accounts  may  be  balanced  either  upon  an  action  at  \u.w 
or  before  the  commissioners  or  the  assignees. (4r) 


(4x)  Ex  parte  Hale,  3  Vez.  jun.  304.  A.  D,  1796.  The  acceptor  of  a 
bill  of  exchano-e  for  200/.  indorsed  by  the  petitioner,  becoming  a  bankrupt, 
the  petitioner  was  obliged  to  take  it  up  ;  and,  being  indebted  to  the  bank- 
rupt's estate  to  the  amount  of  90/.  he  prayed  that  he  might  be  at  liberty  to 
set-off"  the  90/.  The  Lord  Chancellor  dismissed  the  petition  so  far  as  it 
sought  to  set-off  the  90/.  and  there  was  not  any  objection  to  the  proof  of  the 
200/.   But  videHankev  v.  Smith,  3  T.  R.  509.  (App.  46.) 

(4z/)  March,  assignee  of  ?.Iay,  v.  Chambers,  T.  T.  18  Geo.  II.  Bull.  N. 
V.  180.2  Str.  1234.  The  assignee  of  of  a  bankrupt  brought  an  action  for 
work  and  labour  ;  the  defendant  gave  notice  of  set-off ;  and,  at  the  trial, 
produced  a  negotiable  note  given  by  the  bankrupt  antecedent  to  his  bankrupt- 
cy, to  Scott ;  and  Scott's  hand  was  proved  to  tlie  indorsement  to  the  defend- 
ant, but  no  proof  was  given  when  it  was  indorsed  ;  upon  Avhich  the  plaintiff 
called  two  witnesses,  who  gave  strong  evidence  to  show  it  was  after  the  bank- 
ruptcy ;  however,  the  defendant  had  a  verdict ;  but  a  new  trial  was  granted, 
because  such  indorsee  ought  not  be  in  a  better  condition  than  the  drawer,  v/ho 
would  only  have  come  in  as  a  creditor  under  the  commission. 

Dickson  v.  Evans,  6  T.  R.  59.  A.  D.  1794.  The  Court  granted  a  new- 
trial,  Mr.  J.  Rooke  having  nonsuited  the  plaintiff,  by  allowing  the  defend- 
ants to  give  in  evidence,  upon  a  set-off,  notes  made,  but  without  any  proof 
that  they  were  indorsed  to  the  defendant  before  the  bankruptcy.  Lawrance, 
J.  observed,  that  if  the  notes  had  been  made  payable  to  the  defendant  liim- 
self,  he  should  have  thought  it  reasonable  evidence  of  their  having  come  to 
liis  hands  at  the  time  they  bore  date. 

(4:)  The  words  of  the  statute  are  :  "  The  said  commissioners,  or  the 
major  part  of  them,  or  the  assignees  of  such  bankrupt's  estate,  shall  state 
the  account  between  them,  and  one  debt  may  be  set  against  another  :  and 
what  shall  appear  to  be  due  on  either  side,  on  the  balance  of  such  accounts, 
and  on  setting  such  debts  against  one  another,  and  no  more,  shall  be  claimed 
or  paid  on  either  side  respectively. 

Lock  V.  Bennet,  2  Atk.  49.  A.  D.  1740.  Where  there  are  mutual  de- 
mands between  a  creditor  and  a  bankrupt  under  the  clause  in  5  Geo.  11.  ch. 
30.  s.  29.  in  which  are  these  words,   "'no  more  shall  be  claimed  and  paid 


IN    THE    CASE    OF    BANKRUPTCY.  57 


Upon  an  action  at  law  in  the  case  of  bankruptcy,  it  seems 
that  a  sct-ofi'  may  be  given  in  evidence  without  special  plead- 
ing or  notice. (5c) 

When  an  account  is  balanced  before  the  commissioners  or 
the  assignees,  it  cannot  be  litigated  but  by  an  application  to 
the  Great  Seal.  (5^) 


than  appears  to  be  due  on  either  side,  upon  a  balance  of  accounts  stated." — 
The  master  of  the  rolls  was  of  opinion,  that  upon  an  action  at  law  the  defend- 
ant might  set-off  his  demand  against  the  plaintiff',  as  is  done  in  other  cases 
by  virtue  of  the  statute  of  2  Geo.  II.  ch  22.  s.  13.  and  8  Geo.  II.  ch.  24.  s. 
6.  and  that  there  is  no  occasion  to  come  into  a  court  of  equity  to  pray  i\n  in- 
junction to  a  suit  at  law,  and  that  the  plaiinifi'  at  law  may  account. 

(5a)  Grove  v.  Dubois,  I  Term  Rep.  112.  A.  D.  1786.  (App.  25.)  In  the 
case  of  bankruptcy  the  defendant  gave  a  notice  of  set-oft' for  money  had  and 
received  by  the  assignees  for  his  use.  It  appeared  in  e^idence  that  the  as- 
signees had  not  received  any  money,  but  that  the  defendant  had  paid  and 
hiid  out  money  on  account  of  the  bankrupt.  Duller,  J.  I  agree  that  the  no- 
tice of  set-off"  is  bad  ;  but  this  loss  may  be  proved  and  set-off' under  the  gene- 
eral  issue  by  the  28th  section  of  5  Geo.  II.  ch.  30.  The  words  of  the  sec- 
tion are  :  "  That  where  it  shall  appear  to  the  commissioners,  or  the  major  pait 
of  them,  that  there  hath  been  mutual  credit  given  by  the  bankrupt  and  any 
other  person,  at  any  time  before  such  person  became  bankrupt,  the  said 
commissioners.  Sec.  shall  state  the  account  between  them,  iuid  one  debt  may 
be  set-off  against  another,  and  what  shall  appear  to  be  due  on  either  side, 
on  the  balance  of  such  account,  and  no  more,  shall  be  claimed  and  paid, 
on  either  side  respectively."  Therefore  we  see,  by  this  section  of  the  sta- 
tute, that  the  assignees  could  legally  claim  no  more  than  the  balance  upon 
the  account  between  the  pailies.  In  Dickson  v.  Smith,  6  Term  Hep.  57. 
A.  D.  17^4.  Lord  Kenyon.  "  It  is  said  that  the  rule  by  which  we  are  to 
proceed  in  a  court  of  law  under  the  statutes  of  set-off",  is  a  diff'erent  rule  from 
that  by  which  the  commissioners  proceed  under  the  statute  of  5  Geo.  II.  ch. 
30.  but  it  must  be  rememliered  that  that  act  proceeds  on  the  law  of  the 
case,  and  applied  the  same  rule  to  the  conmiissioners  of  bankrupts — N.  B. 
the  practice  is  to  plead  or  give  notice  of  set-oif  upon  an  action  at  law  in  the 
case  of  bankruptcy,  in  the  same  manner  as  under  the  general  statutes  rela- 
ting to  set-off:  and  tliis  practice  seems  to  be  just,  and  to  be  attended  with 
nxany  advantages. 

(5A)  lirown,  executor,  v.  BuUen,  assignee.  Doug.  407.  A.  D.  1780.  This 
was  an  action  for  money  had  and  received  for  the  amount  of  a  dividend  de- 
clared by  the  commissioners  to  be  due  to  the  testator.  The  del'endants  al- 
leged that  there  was  a  balance  due  from  the  testator  to  the  i)ankrupl.  'i'lie 
defendants  pleaded  the  general  issue,  witli  notice  of  set-off.  At  the  trial,  Lord 
Mansfield  would  not  permit  the  defendants  to  avail  themselves  of  the  notice 
of  sei-off",  saying,  that  as  the  conmiissioners  have  a  power  of  setting-off" nui- 
tual  debts,  the  sum  proved  must  be  taken  to  be  the  balance  due  ;  l>iit  if  it 
should  ha|)pen  that  only  one  side  of  the  account  appeared  before  the  com- 
nassioncis,  or  thataiiy  ai  title  was  omitted,  on  cither  side,  on  ai)plication  to 

[ 


58  SET-OFF    BY    STATUTE 


PART  11. 


OF  SET-OFF  IN  BANKRUPTCY  BY  THE  GENERAi, 
STATUTES  OF  SET-OFF. 

THE  general  statutes  of  set-off  extend  to  the  case  of  bank- 
ruptcy.(5c) 

If  the  assignees  of  a  bankrupt  proceed  at  law  on  a  contract 
made  by  tlie  bankrupt  after  tlie  bankruptcy,  it  seems  tliat  the 
defendant  may  set-off  any  debt  on  a  contract  made  on  his  part 
after  the  bankruptcy. (5f/) 


the  Great  Seal,  the  account  would  be  again  opened,  and  referred  to  the  com- 
missioners, or,  in  casjs  of  difficulty,  to  the  Master.  Verdict  for  tiie  plain- 
tiffs, with  leave  to  move  for  a  nonsuit :  the  Court  unanimously  agreed  that 
Lord  Mansfield's  direction  was  ri'^l.t. 

(5c)  Ryal  V.  Laridn,  B.  R.  M.'20  Geo.  II.  1  Wils.  155.  B.  N.  P.  181. 
(App.  48.)  To  an  action  of  indebitatus  assumpsit  by  the  assignees  of  a  bank- 
rupt, the  defendant  pleaded  a  stt-ofi'of  a  greater  sum  due  to  liim  from  the 
bankrupt  before  the  bankruptcy  ;  and  upon  demurrer,  it  was  holdtn  that 
the  statute  for  setting  otf  mutual  debts  does  not  extend  to  assignees  of  bank- 
rupts ;  that  these  can  never  be  considered  as  mutual  debts,  for  where  there 
are  nuitudl  debts,  there  must  be  mutual  remedies.  (Ante  page  23,  where  it 
is  expressly  required  that  th.e  debt  of  each  party  should  be  due  in  his  own 
right.) 

Kidout,  assignees,  v.  Brough,  Cowp.  133.  T.  T.  14  Geo.  III.  A.  D.  1774. 
Assumpsit  for  money  had  and  received  for  the  use  of  the  assignees  shice  the 
bankruptcy,  and  the  same  for  the  use  of  the  bankrupt  before  the  bankruptcy. 
Set-off  of  money  due  from  the  bankrupt  b-.fore  the  bankrxiptcy,  and  also  of  mo- 
ney due  from  the  assignees  since  the  bankruptcy.  Demurrer.  The  Court  were 
clearly  of  opinion  thatthe  defendant  might  set-off  a  debt  due  to  liim  from  the 
bankrupt,  for  the  assignees  are  the  bankrupt ;  and  seemed  to  impeach  the  deci- 
sion in  1  Wils.  155.  That  the  statutes  of  set  off  do  not  extend  to  assignees 
under  a  commission  of  bankruptcy,  as  against  the  general  principles  of  law, 
justice  and  good  sense.  But,  on  the  other  grounds,  judgment  was  for  the 
plaintiff. 

(5cZ)  I  class  these  under  the  gcne-ral  statutes  of  set-off,  because  the  partic- 
ular statute  in  the  case  of  bankruptcy  expressly  requires  that  the  debts  should 
be  due  before  the  bankruptcy. 

Billon  v.  Hyde,  1  Vez.  326.  A.  D.  1749.  There  were  dealings  between 
tlie  plaintiff  and  a  bankrupt  before  the  bankruptcy  ;  which  continued  after  a 
secret  act  of  bankruptcy  had  been  committed.  The  assignees  brought  as- 
sumpsit against  the  plaintiff,  and  recovered  all  sums  which  l^ad  been  paid  to 
him  by  the  bankrupt  after  the  bankruptcy. 


IN  THE  CASE  OF  INSOLVENT  DEBTORS.        59 


PART  III. 


OF  SET-OFF  IN  THE  CASE  OF  INSOLVENT 
DEBTORS. 


^^^HEN  there  is  mutiml  credit  between  an  insohent  debtor 
whose  property  is  assigned  under  the  Lords'  act,  and  any  other 


The  plaintiff  in  equity  insisted  that,  notwithstanding  that  recovery  by  the 
strict  rule  of  law,  still  an  allowance  ought  to  be  made  him  for  all  that  was 
paid  by  him  to  the  bankrupt  v.  iti.in  the  same  period  of  time  ;  which  was  not 
allowed  at  tiie  trial,  or  by  the  commissioners. 

The  Chancellor,  on  the  ground  that  the  assignees  ought  not  to  have  the 
power  of  affirming  the  contracts  on  one  side  and  disaffirming  them  on  the 
other,  ordered  the  cause  to  stand  over,  and  recommended  it  to  the  assignees 
to  compound  in  some  manner :  to  which  recommendation  they  afterwards 
attended. 

Smith,  assignees,  v.  Hodson,  4  T.  R.  2 1 1 .  A.  D.  1 79  1 .  ( App.  49.)  The  de- 
fendant had  accepted  a  bill  for  400/.  for  the  accommodation  of  the  b.^nkrupts, 
which  was  not  due  at  the  time  of  the  bankruptcy.  On  tiie  eve  of  the  bank- 
ruptcy, the  bankrupt  sold  to  the  defendant  goods  to  tiie  amount  of  500/.  at 
six  months  credit.  In  an  action  by  the  assignees  for  the  price  of  these 
goods,  the  defendant  pleaded  a  set-off  of  the  bill  which  he  had  accepted  ;  and 
on  a  case  reserved,  Lord  Kenyon,  in  delivering  the  opinion  of  the  Cou'.t, 
said  :  ""  This  is  an  action  on  tae  contract  for  tlie  goods  sold  by  the  bankrujn  ; 
and,  although  the  assignees  may  either  affirm  or  ilisaffirm  the  contract  of  llie 
bankrupt,  yet,  if  they  do  affirm  it,  they  must  act  consistently  throughout  ;  they 
cannot,  as  lias  often  been  observed  in  cases  of  this  kind,  blow  iiot  and  cold  : 
and,  as  the  assignees  in  this  case  treated  this  transaction  as  a  contract  of  sale, 
it  must  be  pursued  through  all  its  consequences,  one  of  wliich  is  that  the 
party  buying  may  set  up  the  same  defence  to  an  action  brought  !)y  the  as- 
signees, whic'.i  he  might  have  used  against  the  bankrupt  himself,  and  con- 
sequently may  set-off  another  debt  which  was  owing  from  the  bankrupt  to 
him.  Tlierefbre,  on  the  distinction  between  trover  and  assumpsit,  we  are  all 
of  opinion  judgment  of  nonsuit  must  be  entered. 

N.  B.  Though,  in  the  foregoing  case,  the  decision  may  be  founded  upon 
the  5  Geo.  II.  ch.  30.  as  botii  the  debts  were  due  before  tlie  bankruptcy,  so 
as  to  be  set-off  under  that  statute,  yet  the  principle  seems  to  be  the  same  as 
that  laid  down  in  Billon  v.  Hyde. 


OO  SET-OFF     BY    STATUTE. 


person,  the  assignee  must  balance  the  account^  ;   and  the  re: 
sidue  alone  passes  by  the  assignment.  (5e) 


(5(')  32  Geo.  II.  ch.  28.  s.  23.  And  be  it  further  enacted,  that  in  all  and 
every  case  and  cases  where  mutual  credit  sliall  have  been  given  between  any 
prisoner  or  prisoners  who  shall  he  dischart^ed  under  this  act,  and  any  other 
person  oi-  persons,  bodies  politic  or  corporate,  before  the  delivery  of  any 
schedule  or  inventory  of  the  estate  and  effects  of  such  prisoner  or  prisoners 
upon  oath,  as  by  this  act  is  herein  before  directed:  then,  and  in  every  such 
case,  the  respective  assignee  or  assignees  of  such  prisoner  or  prisoners  shall 
have  power,  and  is  and  are  hereby  required,  on  his  or  their  pan  or  parts,  to 
state  and  allow  an  account  between  them,  and  nothing  more  shall  be  deemed 
to  be  vested  by  any  assignment  which  shall  be  made  in  pursuance  of  this  act, 
as  the  estate  or  effects  of  such  prisoner  or  prisoners,  than  what  shall  appear  to 
have  been  due  to  him,  her,  or  them  respectively,  and  to  be  justly  coming  to 
him,  her,  or  thenij  on  or  before  the  balance  of  such  account  when  truly  stated. 


BOOK   II. 

OF  SET-OFF  IN  EQUITY.(5/) 


i\   Court  of  Equity  will  grant  relief  in  any  case  where  there 
is  an  equitable,  without  a  legal,  right  to  set-off.  (ojr) 

If,  upon  the  dissolution  of  a  partnership,  there  is  a  surplus 
after  payment  of  partnership  debts :  a  debtor  to  the  partr.ership, 
who  is  a  separate  creditor  of  either  of  the  firm  against  whom  a 
commission  of  bankruptcy  has  issued,  may  set-off  the  joint 
debt  against  the  surplus  to  which  the  bankrupt  is  entitled. (5//) 


(5/)  I  class  the  cases  in  notes  (5//)  and  (5/)  under  Sct-nffin  Equity,  be- 
cause they  appear  to  be  decided  solely  on  eiiuiluble  principles :  for  the  words 
mutual  credit  in  the  5  Geo.  II.  extends  to  questions  at  law  as  well  as  to  ques- 
tions arising  on  petition  to  the  Chancellor  :  and  it  seems  to  be  clear  tluit  in 
these  cases  there  could  not  be  any  set-off  at  law.  In  Ex  parte  Ockenden,  1  Atk. 
235,  ante,  page  50,  the  Lord  Chancellor  says  ;  "  The  clause  in  the  act  of  5 
Geo.  II.  relating  to  mutual  credit  has  been  carried,  to  be  sure,  fuither,  :aul 
rightfully,  tlian  a  mere  matter  of  account :  but  I  do  not  know  tliat  a  court  of 
equity  has  gone  further  than  courts  of  law  in  the  cases  of  a  set-off." 

It  is,  perhaps,  scarcely  necessary  for  me  to  say  that  I  consider  tl.is  Book 
as  incomplete. 

(5,§-)  Vide  James  v.  Kynnicr,  5  Vez.  jun.  108.  A.  D.  1792.  ante  p.  3, 
(App.  5.)  and  the  following  notes. 

(5/0  Lanesborough  v.  Jones,  1  P.  W.  32;).  It  seems  if  A.  and  B.  are 
joint  traders,  and  T.  S.  owes  A.  and  B.  on  their  joint  account  100/.  and  A. 
owes  the  said  T.  S.  100/.  on  his  separate  account :  T.  S.  cannot  deduct  so 
iTiuch  as  A's  proportion  of  the  100/.  comes  to,  out  of  tlie  jf)Int  delA  ;  for  that 
the  copartnership  debts  of  ,\.  and  B.  are  to  be  hrsl  paid,  before  any  of  tlie 
separate  debts  :  but  if  there  be  a  surplus,  beyond  \\lial  will  pay  the  part- 
nership debts,  then,  out  of  A's  share  of  the  surplus,  T.  S.  may  deduct  the  se- 
parate debt  of  A. 

Ex  Parte  Quintin,  3  Vez.  jun.  2  IK.  A.  D.  1796.  The  i)artnerslii|)  between 
Shepheid  and  Williams,  atlorniLS  ai.d  solii  ilors,  was  (fissohed  in  November 
1794.  In  January,  1795,  a  ronnnissionol'bankruplry  issued  ai^aiiist  Shep- 
herd. ^^'illiams  paid  all  tlie  |)arlnersliip  debts.  Tiie  jjetitioncrs  were  in- 
debted to  the  partnership  lor  business  done,  Sic.  and  were  separate  creditors  of 
Sliepherfl  to  a  greater  amo\int,  for  money  received  by  him  as  ilieii'  agmt. 
The  prayer  of  the  petition  was  to  be  permitted  to  set-olV  the  Iniiiki  upl's  share 
of  the  deljts  due  to  the  partnership,  against  the  debts  due  separately  lr<;m 
the  i)ankrupt  to  the  ])ctiuoners,  and  to  prove  the  residue  of  sue  li  separate  debts 


62  sET-orr   by    statute. 


If  there  are  two  commissions  of  bankruptcy  against  the  same 
person,  the  one  a  joint,  the  other  a  separate  commission,  and 
there  are  the  same  assignees  under  both  commissions,  it  is 
said  that  a  debtor  under  the  joint  commission  may  set-off  a 
debt  due  to  him  under  the  separate  commission.  (5?) 


under  the  commission.  Williams  was  contented  to  receive  one  fourth  of  the 
debt  due  to  the  partnership  ;  which  Avas  the  proportion  of  the  interest.  Solicitor 
General  and  Mr.  Cooke  for  the  petitioii  cited  what  is  added  by  the  reporter  to 
Lanesborough  V.  Jones,  1  P.  W.  326.  and  Mitchell  v.  Oldfield,  4  Term  Rep, 
123.  Attorney  General,  contra,  cited  Ex  parte  Edwards,  1  Atk.  100,  and 
said  the  petitioners  had  no  such  right  to  set-off  at  the  time  of  the  bankruptcy  ; 
and  the  intermediate  act  of  the  other  partner  paying  the  partnership  debts 
could  not  put  them  in  a  different  situation.  Lord  Chancellor.  As  at  law 
there  can  be  no  doubt ;  for  the  action  must  be  brought  in  the  name  of  the  two, 
and  you  cannot  set-off  the  separate  deijt  of  one  ;  I  agree  the  right  is  not  to 
be  varied  by  any  thing  that  has  been  done  since  the  commission  ;  but  the 
right  is  manifest,  the  account  being  clear.  In  equity  it  would  be  very  hard 
where  it  appears  that  all  joint  debts  are  paid  and  that  the  other  partner  is 
satisfied,  and  there  is  a  surplus  in  which  he  is  interested  in  one  moiety,  and 
the  indebted  partner  in  the  other — it  would  be  very  hard  if,  to  the  extent  of 
that  moiety,  the  creditor  of  tliat  partner  cannot  set-off  ?  I  make  the  arrange- 
ment. The  assignees  are  to  stand  in  the  place  of  Shepherd  ;  Williams,  be- 
ing contented  to  receive  his  fourth,  is  only  nominal :  then  shall  I  allow  the 
assignees  to  take  the  rest,  and  not  permit  the  debtor  to  set-off?  I  think  the 
equity  is  a  clear  and  and  a  strong  one.  In  Ex  parte  Edwards,  there  could 
be  no  purpose  in  directing  the  account,  but  with  a  view  to  allow  it.  Oi'dered 
according  to  the  prayer  of  the  petition. 

(52)  Ex  parte  Edwards,  1  Atk.  100.  A.  D.  1745.  The  petitioner,  being 
a  creditor  under  a  separate  commission  against  A.  and  a  debtor  to  a  joint 
commission  against  A.  and  B.  petitioned  that  the  action  brought  by  the  as- 
signees for  the  debt  he  owed  to  the  joint  commission  m.ight  be  stayed,  and 
that  his  demand  upon  the  separate  estate  might  be  allowed,  as  a  set-off  a- 
gainst'the  debt  he  owed  the  joint  estate,  especially  as  the  same  persons  are 
assignees  under  both  commissions.  Lord  Chancellor.  I  doubt  v/hether  the 
debt  could  be  set-off  under  the  statute  relating  to  mutual  debts  ;  because  dif- 
ferent persons  are  concerned  in  one  debt  and  in  the  other,  and  in  distinct 
rights :  but,  as  the  petitioner's  case  appears  to  be  a  hard  one,  I  v/ill  refer  it 
to  the  commissioners  of  the  bankrupts  to  sec  how  much  the  petitioner  ov/ed 
to  the  joint  estate,  and  how  much  was  owing  to  liim  from  the  separate  es- 
tate, and  to  certify  the  same  to  me,  and  let  the  action  brought  by  the  assig- 
nees be  stayed,  and,  in  the  mean  time,  all  further  considerations  reserved  till 
the  commissioners  have  certified.  In  Ex  parte  Quintin,  3  Vez.  jun.  248.  A. 
D.  1796,  the  Lord  Chancellor  says  :  In  Ex  parte  EuAvards,  there  could  be 
no  purpose  in  directing  the  account,  bttt  vrith  a  view  to  allow  it. 


PRACTICE. 


IN  Practice,  when  an  application  is  made  to  set-ofF  judg- 
ments against  each  other  by  the  party  to  whom  the  hirger  h,uni 
is  due,  the  rule  is  for  a  stay  of  proceedings  on  acknowledging 
satisfaction  for  the  lesser  sum  ;  but  when  the  lesser  sum  is 
due  to  the  party  applying,  the  rule  is  to  have  it  deducted,  and 
for  a  stay  of  proceedings  on  payment  of  the  balance.  (5/r) 

The  notice  of  set-off  is  usually  written  underneath  the  plea, 
and  deliAcred  there\vith  to  the  plaintiff's  attornc}^ ;  and  a  copy 
of  the  notice  should  be  kept  by  the  defendant's  attorney,  it 
being  necessary'  to  prove  the  delivery  of  it  at  the  trial. (5/) 

The  plaintiff  may  demand  a  particular  of  the  sum  which  the 
defendant  intends  to  set-off. 


(5/t)    Bull.  N.  P.  336.  Say  costs,  24.     Tyd.  K.B.  679.  Tyd's  costs,   66. 
Mitchell  V.  Oldficld,  4  T.  R.  124.  (App.  13.) 
(51)     1  Cromp.  160.  Tvd  K.  B.  408. 


APPENDIX. 


Dobson  and  Jnoth-er,  Assignees  of  Patrick,  against  E.  Lockharf,K.  li,  H.  T 
3S  Geo.  II J.  A.  D.  1793.  5  Ytr.  Rcji.  133. 

THIS  was  an  action  of  assumpsit  for  goods  sold  and  delivered  by  the  bankrupt 
against  the  defendant  as  a  surviving  partner  ;  to  which  the  defendant  plead- 
ed, 1st.  The  general  issue  ;  2dly.  A  set-off  on  a  bond  given  by  tJie  bankrupt  to  the 
defendiuit,  and  G.  Lockhart,  his  late  partner  ;  odly.  (Another  plea,  not  supported 
in  fact ;)  4tlUy.  Tliat  on  the  11th  of  October  1788  tlie  b:uikrupl  and  tlie  defendant 
became  bound  to  5".  Nicholson,  and  two  otlier  persons,  in  900/.  conditioned  to  pay 
450/.  with  lawful  interest  on  demand  ;  tliat  on  the  16th  May  1789,  the  bankinipt, 
one  Foster,  and  tlie  defendant,  became  bound  to  y.  Wakefield  and  two  other  persona 
in  lOOu/.  conditioned  to  pay  500/.  and  interest  on  the  1st  of  June  1789  ;  that  those 
two  bonds  were  executed  by  tlie  defendant  as  a  surety  for  tiie  bankrupt,  and  for 
his  debt  only  ;  that  before  tlie  bankruiitcy,  ss.  on  the  2ist  of  May  1789,  the  bank- 
rupt became  bound  to  G.  Lockhart  and  tJie  defendant  in  1400/.  conditioned  to  pay 
700/.  on  the  13th  of  February  1790  ;  that  the  last  bond  was  given  for  the  purpose  of 
indemnifying  the  defendant  against  the  two  former,  and  that  the  name  of  G.  Loci- 
hart  was  used  merely  as  a  trustee  for  the  defendant ;  that  afterwards,  and  :dter 
Patrick  became  a  bankrupt,  on  the  14tii  of  December  1789,  the  defendant  was 
obliged  to  pay  Nicholson  and  Co.  470/.  on  the  first  bond,  and  Wakefield  !xn(i  Co.  236/. 
17^.  on  tlie  second  bond ;  that  those  two  sums  are  still  due  to  the  defendant,  and 
exceed  the  money  due  to  the  plaintiHs  on  the  promises  mentioned  in  the  tleclara- 
tion,  and  that  tlie  defendant  would  set  tliem  ott'  against  the  demand  of  the  plaintiffs, 
h-c.  5thly.  (after  stating  the  two  first  bonds  as  in  the  last  plea,  and  that  the  defen- 
dant was  merely  a  surety,  C-c.)  that  before  tiie  bankruptcy  of  Patrick,  to  wit,  on  the 
21st  of  M,iv  1789,  it  was  agreed  between  tlie  defendant  and  the  bankrujjt  that,  in 
order  to  indemnify  the  defendant  against  these  two  bonds,  the  latter  .siioulil  hecomfr 
bound  to  the  former  in  1400/  conditioned  to  pay  700/.  witli  interest  on  the  13th  of 
Februaiy  1790,  and  asafiulhcr  iiulemnity,  tliat  tlie  defendant  should  retain  and 
keep  sucii  monev,  not  exceeding  the  money  to  be  secured  by  tlie  last  bond,  as  should 
at  any  time  be  due  from  G.  L.  and  the  defendant  to  tiie  l)aiikru[)t,  in  respect  of  any 
dealings  between  lliem  in  trade,  until  llie  two  first  bunds  should  be  satisfied,  and 
that  the  defendant  siioiJd,  out  of  the  money  which  should  be  due  fi-om  C.  L.  and 
himself  to  the  bankrupt,  retain  and  set-ofVso  much  money,  not  exceeding  the  last 
bond,  as  he  siiould  at  any  time  pay  oti  the  two  first  bonds  ;  tliat  the  bankrui)t  ac- 
rordingly  executed  such  bond  for  1400/.  &.c.  that  aftir  the  bankruptcy,  in  De- 
cember 1789,  the  defendant  was  obliged  to  |)ay  to  NithoUon  and  Co.  aiul  to  Ji'ake- 
Jield  and  Co.  2cc.  (aa  in  the  last  plea  ;)  that  tin-  iikjiuv  tine  from  the  defendant  to 
tlie  bankrupt  on  the  promises  in  the  (hrlaiation  was  so  due  ami  ouingt«)  him  I'dp 
and  on  account  of  certain  dealings  between  him  and  C.  L.  and  the  <lifcn<laiU  i'l 
trade  ;  and  that  the  sums  paid  by  the  <leli-n(lant  on  the  two  first  bonds  exceed  the 
money  due  to  the  bankrupt  &.c.  and  that  the  <lifend:iiit  would  set-off,  &c.  Ke- 
plication  to  secon<l  plea,  that  at  the  time  of  biinging  the  action  llu-re  wa.s  nnihinf^ 
due  to  the  defendant  on  the  bond,  Stc.  to  the  4th  and  5lh  pleurt,  iJu*;  tht  bank- 
rupt was  not  iiKltbtud  to  the  defcudant  in  mauner  ;ioJ  ftiini,  ?  <■, 


2  ArrENDix. 

On  the  trial  at  Appleby  before  Llord  Kenyon,  the  facts  contained  in  the  last  plea 
beinjj  proved,  it  was  agreed  tliat  the  plaintiff' should  be  non-suited,  he  liaving-  liber- 
ty to  move  to  enter  up  a  verdict  for  him  if  this  court  sliould  be  of  opinion  tliat  he 
was  entitled  to  reco\er  under  these  circumstances.  A  rule  having  been  obtained 
in  tlie  last  term,  callin;^ on  the  defendant  to  shew  cause  wliy  the  verdict  should  not 
be  entered  for  the  plaintiff",  cause  was  now  shewn  against  it  by 

Ckambre,  and  Lambe,  who  contended  that  the  defendant  was  entitled  to  a  ver- 
dict, either  on  the  g'cneral  issue,  or  on  the  I'ourth  or  fillli  pleas.  First.  On  the  ge- 
neral issue  :  though  the  assignees  of  a  bankrupt  are  entitled  to  the  benefit  of  all  con- 
tracts made  by  the  bankrupt,  and  may  therefore  recover  tlie  value  of  goods  sold  by 
him,  they  cannot  vary  those  contracts,  but,  as  representing  the  bankrupt,  they  are 
bound  by  every  p.art  of  tliem.  Now  here  the  contract  was  that  the  price  of  these 
g'oods  sliould  remain  in  the  defendant's  hands  until  it  was  determined  what  would 
be  the  consequence  of  the  surety-bonds  given  by  him  for  the  bankrupt ;  if  those 
bonds  wei'e  discharged  by  the  banki-upt,  then  the  defendant  was  to  pay  for  these 
C'oods,  but  if  the  defendant  were  compelled  to  pay  the  bonds,  then  the  money  so 
paid  was  to  be  considered  as  a  payment  for  the  goods.  This  thei'efore  was  not  a 
C^eneral  sale  of  goods,  but  a  special  contract,  by  which  time  was  given  to  the  defert- 
dant,  and  until  the  happening  of  a  particular  event  he  was  not  to  be  called  upon  to 
pay  for  them.  In  the  event  that  has  happened  the  defendant  must  be  considered 
as  having  paid  for  the  goods  according  to  the  ag-reement,  and  of  course  the  plaintiffs 
have  no  demand  against  him.  Secondly.  Considered  on  the  special  pleas,  the  de- 
fendant is  entitled  to  a  verdict  on  the  ground  of  mutual  credit  between  the  bank- 
rupt and  the  defendant.  By  "mutual  credit"  is  meant  "mutual  trust  and  confi- 
dence." Here  the  bankrupt  gave  credit  by  selling  the  goods,  and  the  defendant  by 
becoming  surety  for  the  bankrupt.  It  is  not  necessary  that  the  demand,  whicli  is 
to  be  set-off' under  the  clause  in  the  stat.  5  Gfo.  II.  c.  30.  respecting  mutual  credit, 
should  arise  before  the  bankruptcy,  if  the  debt  be  paid  afterwards  in  consequence 
of  a  liability  before.  Grove  v.  Dubois,  ante  1  vol.  122  ,•  Hankey  v.  Smith,  a?ite  3  vol. 
507  ;  Smith  v.  Hot/son,  a.  4  vol.  211  ,■  French  v.  Fenn,  there  cited  ;  Toussaintv-  Mar- 
tinnant,  a.  2  vol.  100  ;  and  Martin  v.  Court,  ib.  640. 

Law,  Holroyd,  and  B2ll,  contra.  This  is  disting-uishable  from  the  cases  cited, 
because  at  the  time  of  the  bankruptcy  it  was  uncertain  whether  or  not  there  would 
be  AX\\  debt  fi-om  the  defendant  to  the  bankrupt ;  for  if  the  bond  were  paid  by  the 
bankrupt,  the  defendant,  who  was  a  mere  surety,  woidd  of  course  have  been  dis- 
charged. And  it  never  has  been  held  that  a  debt,  v.hich  rested  in  contingency  at 
the  time  of  the  bankruptcy,  could  be  set-off'.  In  French  v.  Fenn,  and  Hankey  v 
Smith,  there  was  mutual  credit ;  in  the  f  )rmer,  money  had  lieen  advanced  by  the 
defendant  in  order  to  purchase  goods,  the  profits  arising  from  wlvich  were  after- 
wards to  be  divided  ;  and  in  the  latter,  the  bankrupt  had  sold  goods,  and  the  defen- 
dant was  in  possession  of  a  bill  of  exchange  given  by  the  bankrupt ;  that  bill  created 
a  certain  debt,  not  a  contingent  one  like  tlie  present.  The  case  of  Tcussaint  v.  Mar- 
tinnant  only  decided  that  a.Mtimpsit  would  not  lie,  not  that  an  action  on  the  bond 
might  have  been  supported.  Martin  v.  Court  was  an  action  on  an  absolute  bond 
wliich  was  proveable  under  the  commission  :  there  the  counter-bond  was  made 
payable  before  the  principal  bond  ;  and  Biiller,  J.  observed  on  it  that  it  was  the  in- 
tention of  the  parties  that  the  surety  should  have  the  money  in  his  hands  before  he 
shoidd  be  called  upon.  But  here  the  defendant  is  not  entitled  to  set-off',  because 
the  debt  was  not  onl}'  uncertain  at  the  time  of  the  bankruptcy,  but  there  was  a 
lime  Avhen,  if  the  action  had  been  brought  by  the  assignees,  the  counter-demand 
by  tlie  defendant  did  not  exist  ;  and  the  set-off' ought  not  to  arise  by  matter  ex  post 
f.tcto.  But  even  if  the  debt  from  tlie  banki'upt  to  the  defendant  were  certain,  still 
there  was  no  mutual  credit  between  them.  This  action  is  brought  against  the  de- 
fendant, as  a  surviving  p^artner,  for  goods  sold  to  him  and  G.  Lochhart :  the  defen- 
dant therefore  cannot  set-off'a  debt  due  to  himself  alone  to  a  debt  due  from  him  and 
another  person.  Only  those  debts,  wliich  exist  between  the  same  parties  and  in 
tlie  same  right,  can  be  set-off".  Here  credit  was  only  given,  on  the  one  side,  to  the 
bankrupt  by  the  defendant  alone,  and  on  the  other  by  the  bankrupt  to  the  defen- 
dant and  another  person.  As  to  the  sjjecial  pleas  ;  there  is  one  objection  applica- 
ble to  them  both.  It  is  stated  that  the  two  bonds  were  g-iven  by  the  defendant  as 
a  siirety,  and  that  the  counter-bond  was  given  by  the  bankrupt  to  the  defendant 
to  indemnify  him  :  but  that  agreement  cannot  be  considered  as  incorporated  in  the 


APPENDIX.  .3 

bond,  because  that  would  be  to  defeat  the  bond  by  an  agreement  of  less  solemnity 
than  ti.e  bond  itself;  and  if  not,  tiie  a^ieenient  is  void  tur  want  <;f  a  coiisidciuiion  ; 
it  was  nui.um  pactum.  And  even  if  il  eould  be  considered  as  part  of  tlie  bond,  il  is 
objectionable  on  another  ground,  tliat  it  was  given  as  a  security  not  for  any  baluncc 
then  due,  but  for  a  tioating'  balunce  to  arise  on  an  account  not  then  in  existence. 

Lord  Ken  vox,  Ch.  J.  Some  of  tlie  arg-uments  uijjed  at  tlie  bar  g-o  bejund  the 
question  now  tor  decision  ;  there  being'  one  short  gu'ouud,  on  which  we  cainiot  be 
mistaken,  in  saying-  that  the  case  is  in  tavour  of  the  defendant.  '1  Ids  is  an  action  for 
goods  sold  and  delivered  by  the  bankrupt  to  the  delendant;  and  the  (question  is 
whether  the  plaintiiis,  wlio  are  tiie  assignees  of  tiie  bankrupt,  have  a  rig-lit,  under 
all  the  cu'cunistances  of  the  case,  to  exact  payment  for  tlie  g'oods.  Tlie  defendant 
had  various  transactions  witli  the  bankrupt ;  among  otliers,  lie  became  sccurit)  for 
him  in  two  sevend  sums  of  money;  and  at  the  time  of  becoming  such  securit}  the 
latter  engaged  that  the  defendant  should  not  be  called  upon  to  pay  for  the  gocul.s 
until  he  was  indemnified  againstthi.se  bonds.  Tliat  agreeinenl  liaviiig  been  jjroved, 
I  see  no  objection  to  it  in  point  of  law  ;  1  tiiink  it  is  a  good  defence  to  this  action 
under  the  general  issue,  and  tliat  the  defendant  need  not  lia\  c  pleaded  it  specially. 
The  conse(juencc  is  that  the  plaintiffs  have  brouglil  this  action  to  enforce  payment 
of  a  sum  of  money,  wliich  the  defendant  is  not  bound  ellher  in  law  or  conscience  to 
pay  under  tiiese  circumstances. 

AsuHURSr,  J.  This  case  falls  within  the  statue  5  Geo.  II.  c.  30.  s.  28,  which 
enacts  that,  where  there  have  been  either  mutual  credits  or  mutual  debts  bet\seen 
the  bankrupt  and  any  other  pel. son,  before  the  bankruptcy,  the  commissioners  shall 
state  the  account  between  them,  and  one  debt  may  be  set-ofl  against  another  ;  and 
what  shall  appear  to  be  due  on  either  side  on  the  balance  of  such  account,  and  no 
more,  shall  be  claimed.  But  it  lias  been  contended  that  the  agreement  in  this  case 
must  be  so  restrained  in  its  construction  that  the  defeiuhmtis  not  entitled  to  retain 
any  money  that  he  should  p;iy,  under  the  surety-bc^nds,  after  the  bankruptcy.  Th« 
intention  of  the  (larties,  however,  in  making  this  contract  was  that  the  defendant 
should  not  pay  for  the  goods  until  he  was  indemuitied  against  any  payment  lie 
should  make  upon  either  of  tiie  bonds  ;  he  had  a  security  depcjsiteil  iii  his  hands  ; 
and  thougii,  in  fact,  he  was  notdamnihcd  until  after  the  baiiki-uptcy,  yet  the  pay- 
ment under  this  agreement  has  a  retrospect  to,  and  must  be  considireil  as  Lf  made 
before,  the  bankruptcy.  It  is  true  that,  generally  speaking,  a  creditor  of  the  bank- 
rupt cannot  prove  any  debt  under  the  commission  that  does  not  become  due  before 
the  bankruptcy;  but  this  agreement  and  bond  take  this  case  out  of  the  general 
I'ule  ;  and  though  the  defendant  was  not  called  ujion  to  ])ay  either  of  the  bonds, 
which  he  had  executed  as  surety  for  the  baukrujit,  until  after  tiie  bankruptcy,  yet 
he  may  have  recoui'se  to  a  secmuty  which  has  a  retrospect  to  a  time  antecedent  to 
tlie  bankruptcy. 

Bl  1  i.EK,  J.  I  agree  witli  the  plaintiffs'  counsel  that  there  is  no  case  in  which  it 
has  been  held  tliat,  where  it  depends  on  some  future  event  which  does  not  take 
place  until  after  tlie  bankruptcy  whetiier  or  not  tiiere  will  be  any  debt  against  the 
bankrupt,  the  debt  can  either  be  proved  under  the  comnussion,  or  set-oH  against  a 
demantl  made  by  the  assignees.  But  tliat  is  not  like  tiie  present  case.  The  (jues- 
tion  here  arises  not  on  the  set-ofl",  but  on  the  plainlifls'  demand ;  and  it  must  be 
considered  in  tlie  same  light  as  an  action  brought  b}  tiie  assignees  to  recover  goods 
sold  by  the  bankrupt,  he  having  given  a  day  of  payment ;  if  goods  be  sold,  and 
twelve  months'  credit  be  given  by  tlie  siller,  be  cannot  maintain  an  aciion  until 
that  time  be  e.\pired.  Now  in  this  case  the  goods  were  solil  on  tlie  express  condi- 
tion that  the  defendant  should  not  pay  for  them  till  the  bonds  were  discharged  by 
the  bankrupt;  those  bonds  were  not  discharged  by  him,  but  the  defendant  was 
obliged  to  satisfy  them,  and  therefore  the  plaintiffs  cimnot  maintain  their  action} 
for  according  to  the  terms  of  the  original  contract  they  have  no  cause  of  action.  It 
has  been  argued  however  that  the  defendant  could  not,  by  virtue  of  this  agree- 
ment, have  a  lieiKjn  a  floating  balance  ;  whatever  may  be  the  general  rule  res|)eet- 
ing  such  alien  where  there  is  no  agreement,  there  is  no  reascin  why  the  parties 
may  not  by  express  agreement  make  a  lieu  on  a  floating  balance ;  and  here  tiiey 
fiavc  done  so. 

Gkose,  J.  I  am  sorry  to  sec  such  an  action  as  this  brouglit  by  tlie  assignees  of  a 
bankrupt  in  a  case  where  it  is  impossible  to  <loubt  about  the  justice  of  the  cast', 
even  Uiough  there  were  any  doubt  alioui.  the  law  lespccting  it.     Hut  I  think  tU»t 


4  APPENDIX. 

the  plalntiflTs'  clemrmcl  is  as  clearly  ai^ainst  law  as  It  \s  against  conscience.  This 
question  does  not  depend  on  tlie  statutes  of  set-otl',  but  on  the  orighial  agreement 
between  the  parties,  which  (I  think)  entitles  the  defendant  to  a  verdict  under  the 
general  issue.  To  an  action  for  goods  sold  by  the  bankrupt  the  defendant  answers 
that  he  is  not  liable  to  pay  because  before  the  sale  he  had  become  a  smety  in  two 
bonds  for  the  bankrupt  who,  in  order  to  indemnify  the  defendant,  engaged  that  he 
shoiJd  retain  any  money  that  should  be  due  from  him  to  the  bankrupt,  in  respect 
of  any  dealings  between  them  in  trade,  until  those  bonds  should  be  satisHed,  and 
that  he  should  retain  out  of  such  money  whatever  he  should  pay  on  those  bonds  ; 
it  appears  that  in  fact  he  has  paid  asco-obligcc  of  these  bonds  more  than  the  value 
of  the  goods  in  question,  and  yet  the  assignees  now  insist  that  he  shall  pay  for  the 
goods  themselves.  But  on  this  state  of  the  case  no  money  is  due  under  the  agree- 
ment ;  and  consequently  tiie  plamtilis  are  not  entitled  to  recover. 

Per  Curiam.  Judgment  of  nonsuit., 

Sturdy  and  Another^  Assignees  of  Blakiston  a  Bankrujit,  against  Jrnaud, 
K.  B.  E.  T.  30  Geo.  III.  A.  D.  1790.  3  Ter.  Reji.  599. 


D 


,EBT  on  a  bond  from  the  defendant  to  the  banki'upt  before  his  bankruptcy, 
dated  27th  September  1788,  conelitioned  for  the  payment  of  an  annuity  of 
100/.  by  quM'terly  ijayments  by  the  defendant  to  the  bi.nkrupt.  The  defendant 
pleaded  that  at  the  time  of  commencing  this  action  onh'  four  quarterly  payments 
•were  due;  that  on  the  29th  September  1788,  and  before  tills  action  was  brought, 
and  also  before  the  bankruptcy,  the  defendant  had  lent  200/.  bearing  interest,  to  the 
bankrupt  and  another  on  their  promissoiy  note,  payable  on  demand;  that  the  bank- 
rupt, before  his  banki-uptcy,  agreed,  and,  by  a  writing  under  his  hand  of  the  same 
date,  authorised  and  empoirered  the  defendant  to  retain  out  of  the  annuity,  as  the  same 
should  become  due,  the  200/.  and  mterest;  which  200/.  and  the  interest  still  re- 
main due  in  arrear  and  unpaid,  otlierwise  than  by  retaining  the  same  out  of  the  an- 
nuity so  due ;  and  that  the  arrears  of  that  annuity  are  still  insufficient  to  satisfy  the 
same.  The  plaintiffs  replied  the  bankruptcy  of  Blakiston  after  tlie  above  authority 
given,  and  the  assignment  of  his  efiects  to  the  plainlifts  before  either  of  the  quar- 
terly payments  of  the  annuity  became  due.  To  tliis  replication  there  was  a  de- 
murrer and  joinder  in  demurrer. 

Holroyd  was  to  have  argued  in  support  of  the  demiUTef ;  but  the  Court  desired 
Shepherd,  on  the  other  side,  to  begin;  who  contended.  First.  That  the  defendant 
had  no  right  to  retain  the  .arrears  of  this  annuity  against  the  debt  due  by  him  to 
the  banki-upt,  on  the  ground  that  the  agi-eemcnt  operates  as  a  defeasance,  because 
there  can  be  no  defe.a'sance  to  a  deed  by  a  mere  writing  not  under  seal.  Blemer- 
hasset  v.  Pierson,  3  Lev.  234.  Secondly.'Neither  could  the  defendant  retain  on  the 
ground  of  a  lien ;  for  in  all  the  cases  where  that  defence  has  been  allowed,  some- 
thing existed  which  was  put  into  the  hands  of  the  creditor,  as  a  bill  of  lading,  a 
policy  of  insurance,  a  bond,  or  the  like  ;  but  here  nothing  existed,  wliich  could  be 
deposited  with  the  defendant.  Tliirdly.  Still  less  can  this  retainer  be  supported  on 
the  ground  of  a  set-off.  The  agreement  was  amere  authority  to  retain  the  payments 
of  an  annuity //they  became  due  :  but  none  of  those  pajonents  were  due  at  the 
time  of  the  bankruptcy,  and  it  was  contingent  whether  or  not  any  would  be- 
come due,  it  depending  on  the  defendant's  life.  This  therefore  was  nothing;  more 
than  a  contingency  which  could  not  have  been  proved  under  the  commission  of 
bankrupt;  and  consequently  cannot  be  set-off. 

Lord  Kenyon,  Ch.  J.  the  doctrine  of  lien  and  of  set-off  bears  no  relation 
to  the  question  now  before  us ;  and  indeed  I  should  be  sorry  for  the  plaintiffs  them- 
selves if  the  law  were  with  them,  since  their  conduct  is  so  unconscientious  that  if 
the  defendant  were  to  apply  to  a  court  of  equity  for  relief,  tliat  court  would  not 
only  give  such  relief,  but  would  also  decree  the  plaintiffs  to  pay  the  costs  both  in 
law  and  equity;  on  the  same  principle  on  which  Sir  Thomas  Moore,  wlicn  Lord 
Chancellor,  proceeded  when  he  first  gave  relief  against  the  penalty  of  the  bond,  the 
obligee  In  that  case  having  paid  the  sum  mentioned  in  the  condition  after,  though 
not  on,  the  day.  This  is  an  action  brought  on  a  bond,  which  was  made  for  secur- 
ing the  payment  of  an  annuity  at  certain  times  In  the  year ;  and  before  the  time  of 
the  first  inst^ment  the  obligor  lent  to  the  obligee  200/.  in  order  to  secure  the  repay- 


APPENDIX.  5 

ment  of  which  he  entered  Into  this  agreement,  stated  in  the  plea,  by  which  he 
was  authorised  to  retain  the  payments  ot"  the  annuitv  from  time  to  time  till  the  200/. 
and  interest  should  be  paid.  But  in  answer  to  this  it  is  said  that  these  pajTnents 
did  not  become  due  till  after  the  bankruptcy  of  the  oblig'ee,  and  that  therefore  they 
cannot  be  retained  against  his  assi_gnecs.  Now  injustice  and  conscience  it  is  im- 
possible to  I'aise  any  doubt  ;  neither  is  there  any  doubt  in  point  of  law  ;  for  the 
condition  of  the  bond  has  not  been  broken,  and  conseqviently  no  action  can  be  main- 
tained upon  it.  It  cannot  be  said  that  the  condition  has  been  broken,  when  it  ap- 
pears that  payment  has  been  made  according  to  the  terms  of  it.  For  though  this  is 
not  a  formal  plea  of  soivit  ad  diem,  yet  it  is  equivalent  to  it.  But  it  is  said  that 
this  cannot  be  so  considered,  because  the  assignees  had  a  right  to  those  payments 
Avhich  became  due  after  the  bankruptcy  :  but  they  have  only  that  property  to  which 
the  banki-upt  is  entitled,  and  they  must  take  ii  subject  to  his  equit}  ;  and  here 
those  pajTnents  were  anticipated. 

Ash  HIRST,  J.  The  defence  stated  in  the  plea  does  not  contradict  the  an- 
nuity bond  ;  on  the  contrary,  it  is  perfectly  consistent  with  it,  and  proceeds  on  the 
supposition  of  there  being  such  a  bond.  The  plea  affirms  tlu-  l)ond,  anil  specifies 
the  mjde  by  which  the  money  lent  to  the  obligee  was  to  be  repaid,  namely,  by  re- 
taining the  pa}Tnents  scciued  by  the  annuity  bond.  And  it  was  competent  to  the 
bankrupt  to  enter  into  such  an  agreement  before  his  bankruptcy. 

BuLLER,  J.  This  case  does  not  want  the  assistance  of  an  act  of  parli^nt,  or 
of  a  coui-t  of  equity.  There  is  indeed  an  old  case  which  said  that  payment  before 
the  day  woidd  not  discharge  the  bond.  But,  in  the  first  place,  that  case  has  been 
frequently  over-ruled  ;  and  if  it  were  still  law,  it  woiddnot  govern  tliis  case  ;  be- 
cause it  has  been  held  that  the  obligor  may  plead  it  as  payment  at  the  day,  and 
this  woidd  be  e\idence  of  sucli  pavment. 

Grose,  J.  declared  himself  of  tlie  same  opinion. 

Judgment  for  the  defcndant. 

James  v.Kynnier^  In  Chan.  J.D.  1799.  5  Vcs.  Jim.   108. 

IN  1789  Rice  yames  and  Richard  Beckford  carrying  on  business  in  partnership  in 
Lon(U)u  as  merchants,  borrowed  19,000/.  on  their  joint  and  several  bonds  ;  and 
for  further  security  assigned  a  mortgage  upon  an  estate  in  Jamaica  for  45,000/. — 
Of  the  money  borrowed  2,500/.  was  advanced  by  the  house  of  Hutchinson,  Ro- 
bert and    William  Mure. 

In  May  1793,  an  agreement  was  entered  into  for  the  sale  of  fames'  interest  in 
the  partnership  to  Jamea  IngHnh  Keighley,  for  o0,500/.  payable  by  instalments. 
This  agreement,  though  con.sented  to  at  a  meeting  of  tbe  creditors,  was  not  com- 
pleted till  1797  ;wiien  the  deeds  were  executed,  and  the  bonds  of  A  c/y^^n/ and  Keigh- 
ley  were  exchanged  for  those  of  yames  and  Bedford,  except  the  bond  for  tiie  debt 
of  2,500/.  to  tiie  Mures  ;  but  tlie  money  was  deposited  by  Keighley  at  a  banker's. 
In  October  1793,  the  Mures  applying  for  jjayment  of  their  bond,  Bedford  sSikl,  it 
was  not  then  convenient ;  upon  which  they  requested  that  they  might  be  accom- 
modated with  such  sum  of  2,500/.  as  a  loan,  to  be  repaid  at  a  future  period. — 
Keighley  ottered  to  lend  part  of  the  money  deposited  by  him  in  pursiiance  of  the 
agreement  for  the  purchase  of  yames'  share  in  tlie  jjartncrship,  if  ynmes  woidJ 
consent.  Robert  Mure  accordingly  njjon  the  21st  of  October  wrote  to  yames  ;  sta- 
ting their  wajit  of  money,  the  application  to  Rcdfurd  K.o\\\\i:\<.-  them  "  by  an  ajijUi- 
••  cation  to  Mr.  Keighley  to  take  up  your  <lebt  to  us  secured  uywn  William  Beci- 
"ford\  esUte  eitiur  wholly,  or  to  acconiniodatc  us  with  the  amount  upon  oiirc'ii- 
"  K'-^K^^K  to  repay  it  at  a  future  j)criod  :  tiiis  latter  mode  BrcJford  to\d  nic  would  be 
most  agreeahle  to  him  ;  and  that  he  would  mention  it  to  Keighley." 

This  letter  proceeded  to  statt;  that  Keighley  had  no  other  money  disengaged  but 
what  is  lying  at  tlie  banker's  to  be  [)aid  U>  yames  upon  the  signature  ofthedee<ls  ; 
hut  professes  himself  ready  to  accommodate  tli<ni,  provitled  yames  will  give  his 
consent  to  his  appropriating  so  mii<h  of  the  moiuv  to  tliat  pur[)()se. 

Upon  tliis  letter  yames  came  to  London,  and  n  i cived  from  Keighley  2..'i00/ 
which  he  immediately,  upon  the  2Mi  of  October  17'JJ,  delivered  to  the  Munt  : 
and  he  received  from  them  a  promissory  note  for  th:il  anu)unt,  payable  to  him  tlircc 
months  after  date.   Upon  the  31st  of  December  1793,  tiic  MurrS bv.c^mc  buikyupt. 


6  APPENDIX. 

Since  1793,  th«  interest  upon  the  debt  to  the   Mures  was  paid  up  to  17^7,  by  Beck' 
ford  and  Kcighlty,  or  by  Kti^ldey  after  the  death  of  Bcckjord. 

I'he  bill  was  tiled  by  ^^'(i'ww  ;  prayinjj,  that  it  may  be  declared  tliatthe  sum  of 
2,5001.  paid  bytiie  plaintifi'  to  the  Mures,  was  a  payment  or  part  p:iyment  of  the 
debttlien  owing  to  them  from  the  plaintiff  and  Bedford  ;  or  that  the  plaaitirt  is  en- 
titled to  have  such  payment  set-ori'  against  such  debt  ;  that  an  account  may  be 
taken  of  wliat  remains  due  after  allowing  such  payment  or  sei-oli  ;  and  that  upon 
payment  ot'iiie  balance  by  the  plaintitti  tlie  assignees  of  the  Mures  njay  be  decreed 
to  deliver  up  the  bond,  and  to  assign  their  interest  in  the  mortgage  to  the  pUuuliif. 

The  bill  stated,  tliat  as  tbere  remained  an  unsettled  account  respecting  tiie  in- 
terest of  the  said  debt  of  2,500/.  no  hnal  discharge  was  given  to  the  plamliii  upon 
his  paying  over  the  money  to  the  Mures  ;  and  therefore  by  way  of  acknowledg- 
ment for  the  receipt  of  that  sum  he  received  their  promissory  note  ;  by  means 
■whereof  the  principal  debt  was  paid  off ;  and  nothing  Remained  ownig  in  respect 
gf  the  said  debt  except  some  small  sum  for  interest  at  that  time  owing. 

Tlie  defendants,  the  assignees,  by  their  answer  stated,  that  they  believe,  the 
Mures  at  the  time  of  the  application  to  Beckford  intended,  that  the  money,  winch 
should  be  advanced  in  consequence,  should  be  in  discharge  of  the  debt  due  to 
them  ;  but  tliat  the  plaintiff  advanced  the  same  as  a  distinct  loan  from  himself  to 
them,  and  took  a  note  accordingly  ;  and  for  that  reason,  not  for  that  in  the  bill 
mentioned,  no  final  discharge  w.«y  given  upon  that  occasion  for  the  debt  of  2,500/. 
due  from  Bedford  a.nd  jfaities  ;  and  tliat  ever  since  May  1793,  Keigldey  has  not  only 
been  understood  to  be  the  debtor  instead  of  the  plaintiff  to  all  the  creditors  of  the 
house,  but  lias  actually  been  in  possession  jointly  with  Beckford  of  the  ellects  of 
tlie  paraiersnip. 

The  defendants  therefore  insisted  that  the  plaintiff  ought  not  to  be  considered 
as  interested  in  the  said  debt  of  2,500/.  as  surviving  partner  of  Beckford  ;  and  as  as- 
signees of  the  Mures  they  claim  the  whole  debt;  contending,  that  tiie  advancement 
of  tliat  money  to  the  bankrupts  was  no  payment  or  part  payment  of  the  debt ;  and 
the  plaintiff  is  entitled  only  to  prove  that  sum  under  the  commission. 

The  book-keeper  of  the  partnership  by  his  dep  sitions  stated,  that  the  bond  to 
the  Mures  had  not  been  exchanged,  because  Keighley  did  not  know  who  had  a 
right  to  it.  He  also  stated,  that  the  instalments  of  the  purchase -money  for  the  sale 
of  the  plaintiff's  share  were  paid  by  Beckford  and  Keighley  out  of  the  funds  arising 
from  the  property  of  the  late  house  of  Beckford  and  James  and  monies  provided  by 
Keighley. 

The  Attorney  General,  Mr.  Mansfield,  and  Mr.  Steele  for  the  plaintiff,  after  men- 
tioning Ex  parte  ^dntin  (a),  French  v.  Fenn  (/>),  Ex  parte  Frescot  {c),  and  Lord 
Xen  tioii's  opummin  Smith  v.  Hodson  (d)  in  support  of  the  conclusion,  that  to  sustain 
a  set-off  in  equity  thei-e  need  not  be  strictly  mutual  debts,  where  there  is  clear 
mutual  credit,  (e)  were  stopped  by  the  Court. 

Lord  Chancellor.  Is  there  any  doubt,  that,  where  there  are  upon  account 
mutual  credits  between  two  parties,  though  they  cannot  set-off  at  law,  yet  it  is  the 
common  ground  of  a  bill  ?  If  yanies  had  brought  an  action  against  Alure  upon  the 
note  supposing  no  bankruptcy  liad  taken  place,  1  should  have  stopped  that  action, 
while  he  was  debtor  upon  the  bond.  When  there  comes  a  case  of  bankruptcy,  it  is 
much  stronger.  Between  solvent  persons,  there  might  be  a  ground  to  say,  Indul- 
gence was  given,  the  credit  extended  ;  and  therefore  that  credit  ought  to  be  con- 
tinued. But  the  moment  a  banki-uptcy  comes  the  account  is  to  be  settled.  They 
miglit  sue  Bedford's  executors  at  law  :  but  I  should  stop  the  action.  Therefore 
there  is  a  clear  mutual  credit. 

The  Solicitor  General,  Mr.  Cox,  and  Mr.  Mure  for  the  defendants. — It  Is  unneces- 
sary to  controvert,  that  your  Lordship  would  allow  an  equitable  set-off,  if  there 
were  either  mutual  debts  or  mutual  credits  :  but  this  is  a  case  neither  of  mutual 
debts  nor  mutual  credits  in  equity.  This  debt  was  one  of  those,  which  by  the 
agreement  in  1793  Keighley,  took  upon  himself  The  plaintiff  was  from  that  mo- 
ment completely  released  ;  though  his  name  remained  upon  the  bond.  The  debt 
was  wholly  transferred.     Though  the   bond  was  not  exchanged,  the  agreement 

(a)  Ante,  vol.  3.  248.  (b)  1  CooPs  Bank.  Laiv,  569  (c)  1  Ati.  231. 

(d)  4  Term  Rep.  B.  jR.2il.  (e)  See  more  authorities  coWcciQdl  Cook's  Ba.'iL 
Lav),  568. 


APPENDIX.  7 

ie"stende(l  to  this  debt  as  well  as  the  rest ;  and  after  that  agreement  your  Lordship 
would  nol  have  permitted  yames  to  be  sued.  He  was  therct'orc  a  mere  strai'ger 
as  to  th;it  bond  at  tlie  time  oi'  tlie  tr:msaction  of  the  note.  Then  the  Mures  :.pply 
for  payment,  not  to  yavits,  but  to  •Bccljord  and  Ktighley.  Tlie  case  first  attempted 
by  tlie  bill  was,  that  the  money  was  paid  in  the  discharge  of  the  bond.  That  is  now 
given  up  ;  and  it  is  admitted  that  another  arrant,^enunt  took  place.  The  proposi- 
tion was,  that  Keighlry,  not  James,  should  advance  the  money;  and  the  (|nestion 
was,  whether  KeighU-y  should  be  authorised  for  that  accommodation  to  use  tlie  sum 
which  he  had  deposited  for  the  pvuxhasc  of  j^amts'  share.  If  that  transaction  had 
taken  place,  and  Kcighky  had,  instead  of  makinfj  the  ]iayment,  taken  a  note,  all 
this  equity  woidd  have  arisen  between  him  and  the  Murts ;  upon  this  ground, 
that  upon  the  consideration  that  he  was  liound  to  pay  the  bond,  he  ag^ieed  to  pay 
the  money.  But  what  was  done  was  not  in  pursuance  of  that ;  for  the  plaintiff 
thoug-ht  fit  to  take  up  part  of  that  sum  from  Kdg/ilty's  banker.  That  became  liis 
money  ;  and  he  chose  to  lend  it  to  the  Mures  for  their  accommodation.  In  wliat 
sense'  is  the  plaintilf  indebted  to  the  Mures?  Whatever  was  tlie  consideration, 
that  did  not  make  a  mutual  credit.  In  French  v.  Feiui  there  were  direct  nnitual 
credits  between  two  persons  tiiemselves.  In  Ex  parte  l^tintin  all  your  Lordship 
did  was  to  get  over  the  point  of  form.  There  could  not  liave  been  a  set-ofl'  at  law ; 
but  the  partner,  v.  ho  would  have  been  entitled  to  a  moiety  of  the  clear  surplus, 
was  himself  debtor  individually  to  the  petitioners.  There  were  clear  mutual  debts ; 
and  the  only  difhculty  was  as  to  the  form  of  the  action  at  law.  But  it  is  not  upon 
anv  difliculty  of  that" kind  that  we  rest,  but  that  after  the  purchase  of  yuvics'm- 
terest there  was  no  mutual  debt  or  credit  between  yavies  and  Mure,  but  only  lie- 
twecn  Ktighley  U-wd  Mure ;  m\(\\\\va.\.  ycmies  did  was  only  for  the  accommodation 
of  his  former  partnership,  himself  not  bein,^  liable,  or  even  asked  for  pa\  ment- 
They  only  desired  him  to  permit  Keighley  to  lend  so  much  of  tliat  money;  but  he 
savs,  he  will  iiimself  do  it. 

Lord  Chancellor.  I  have  not  a  particle  of  doubt  upon  this  case;  whicli  i.s 
the  clearest  I  ever  heard.  It  mig-ht  have  been  matter  of  consideration,  wliether 
the  bill  should  be  filed  by  Keighley  or  James;  and  I  rather  think  the  e(|uity  of  tlie 
former  the  more  preg-nant  and  obvious,  f()r  with  tlie  knowledg-e  of  the  Mureshi-  lias 
paid  part  of  the  consideration,  for  \\  hich,  he  was  to  make  himself  liable  to  the  debts, 
throug'h  the  medium  of  James.  Giving'  up  the  bond  -will  put  an  end  to  the  suit 
compietelx- ;  and  I  may  as  w(  11  make  the  declaration  upon  tliis  bill  as  any  other. 

At  the  time  of  tliis  transaction  tiie  Mures  had  not  accejited  Keighley,  nor  g-iven  up 
that  particular  bond.  The  transaction  of  the  change  of  die  jiai tnersliip  was  not 
then  a  completed  transaction.  Under  these  circumstanceu  Kiighley  going-  on  with 
the  purchase  had  money  applicable  to  the  settlement  of  that  transaction,  wiien  the 
business  could  be  finished.  The  aj/plication  was  made  to  James,  that  he  would 
ag^rec,  that  money  should  y;o  to  the  relief  of  the  Mures,  creditors  of  the  partnersliip. 
The  mode,  in  which  he  does  it,  is  by  taking-  this  note.  The  ti-;.nsaclion  going-  on 
between  Keighley  and  him,  I  never  wuuld  let  him  jn-oceed  upf.n  that  note.  The 
fact  is  beyond  a  doubt,  that  the  partnership  eflic'cts  of  Beckford  and  James  have  paid 
this  debt  to  the  Mures.  The  decree  must  be  accoi<ling^  to  the  pia\er  of  the  bill, 
without  costs  ;  I  cannot  make  the  assignees  pay  costs.  The  plaintifl  niust  pay  the 
defendant  Keighley  his  costs.  If  any  thing-  is  due  to  the  plaintiif,  he  must  come 
in  as  a  creditor.     The  note  must  be  deli\cied  up. 

Tlirustout  vn  the  Demise  of  Barnes  v.  Crofter.   C.  P.    T.  T.    1 2  Geo.  111. 
2  Blacks.  Jie/i.  826. 


B 


ARNES,  the  lessor  of  the  plaintifl',  ha<l  a  judgni(  nt  last  Miihaelinas  tctm,  f(U- 

•  401.  5s.  Hg-ainst  the  defendant,  for  his  debt  and  costs,  on  an  action,  for  the  nsr 

jiiid  occu[>ation  of  the  premises  ;  but  was  n(»n-suited  in  the  jjresi-iit  cause,  the  Hil- 
ary icrm  a<t(  rwards  ;  tlie  costs  of  which  are  taxed  at  12/.  5s.  for  non-payment  of  I 
which,  an  attaclmient  is  taken  out  against  tlie  plaintill. 

Now  .Vrtjo  for  tlic  plaintifl  nio\(<l,that  tlu-  12/.  5s.  mi^lit  be  deducted  out  of  the 
Af)l.  5s.  and  proreedings,  on  the  attac  hment,  be  sta\ed. 

Walker  shewed  for  cause,  that  it  wa.s  a  new  attempt,  to  set-ofl' nnitnal  d.l'ti.  due 
•n  jud^mtm.     That  the  statute  relates  only  to  inuluid  debts  at  tlic  lime  ol  tna', 


8  APPENDIX. 

♦ 

upon  an  action  of  debt,  or  in  such  a  case,  wherein  action  of  debt  would  He.  But 
this  is  an  application  to  stop  the  execution  of  the  law.  There  is  also  a  difierence 
in  the  nature  of  the  executions  themselves.  One  for  debt  as  well  as  costs,  for 
•which  an  action  would  lie  on  the  judgment;  the  other  for  costs  only,  to  be  reco- 
vered by  process  of  contempt. 

Sayer,  in  support  of  the  rule,  cited  Tulo  and  Lowe,  16  Geo.  II.  1  Barn.  102. — 
Scoffin  and  Robinson,  26  Geo.  II.  2  Barn.  128,  a  rule,  for  deducting  costs  of  one 
verdict,  from  those  of  another.  And,  if  the  court  will  sct-ofi'  costs  at  common 
law  ;  a  fortiori,  they  will  do  it  under  a  rule  for  judgment  as  in  case  of  non-suit. — 
Also'  Roberts  and  Figgs,  28  Geo.  II.  2  Barn.  Sufpl.  12.  And  Roberts  and  Macoul, 
Trin  9  Geo.  III.  a  rule  to  shew  cause,  why  tliirteen  griineas  costs,  taxed  against 
the  plaintiff  in  a  former  cause,  should  not  be  set-off  against  sixteen  gmneas  co.sts, 
recovered  against  the  defendant  in  this  cause.  It  was  shewn  for  cause,  that  the 
plaintiff  was  insolvent;  and,  that  his  attorney  had  a  lien  upon  these  costs  for  his 
bill.  But  it  was  held,  by  TVilmot  chief  justice  et  Cur.  that  the  attorney's  lien  was, 
only  upon  what  the  plaintiff  was  entitled  to  have,  viz.  the  difference. 

And,  by  De  Grev  cliief  justice,  Gould,  Blackstone,  and  Nares,  justices,  the  cases 
cited  have  settled  the  point  ;  and  on  the  justest  ground.— Rule  absolute. 

Barker  adminstratnx  v.  Bruham,  C.  P.  H.  T.  13   Geo.  III.  2  Blacks.  869. 

iS'.  C.  3  Wils.  396. 

THERE  being  due  to  the  defendant  Braham  102/.  18.?.  \d.  from  the  plantlff  as 
administratrix  of  her  husband,  on  the  judgment  recovered  in  the  King^  Bench 
in  Hil.  1769,  (as  stated  in  the  preceding  case)  the  plaintiff,  in  the  same  right  as  ad- 
jninistratrix,  brought  this  action  against  Braham  in  this  com-t  for  a  debt  due  to  the 
intestate,  and  had  a  verdict  for  106/.  9*.  6d.  last  Trinity  term,  and  judgment  there- 
upon. Now  in  last  Michaelmas  term,  Sayer  for  the  defendant  moved,  that  the  said 
102/.  18.y.  Id.  might  be  deducted  out  of  "tlie  106/.  9*.  6^.  and  on  payment  of  the 
balance  to  the  plaintiff  with  costs,  execution  might  be  stayed. 

Bavy  and  Burland  were  prepared  to  shew  cause  ;  but  having  informed  the  court, 
that  there  was  a  WTit  of  error  then  pending  in  the  Exchequer  Chamber,  on  Uie 
suit  Braham  and  Barker  administratrix  in  the  King's  Bench  (which  was  sworn  not 
to  be  brought  for  delay,  but  upon  real  error)  the  court  enlarged  the  mle  till  the 
second  Mondav  in  this  term. 

In  the  mean  time  tlie  defendant  Braham  (having  discovered  the  error  in  the  re- 
cord of  the  couit  of  King's  Bench)  had  leave  to  amend,  whereupon  that  judgment 
was  affirmed. 

And  now  it  was  shewni  for  cause  agamst  the  present  i-ule,  that  it  was  anew  at- 
tempt, and  went  beyond  the  statute,  which  only  allows  a  set-off  to  be  pleaded  or 
given  in  evidence  onthetr/a/;  but  does  notallowonejudgmentto  be  set-off  against 
another.  And  that  in  the  present  case,  it  might  possibly  entangle  the  plamtiff  m 
a  devastavit,  as  there  may  be  debts  of  a  higher  nature  than  this  judgment.  Besides, 
the  former  judgment  being  given  in  the  court  of  King's  Bench,  this  court  can  take 
no  cognizance'of  it ;  for  a  question  may  arise  in  that  court,  whether  Braham's 
wliole  debt  was  not  satisfied,  by  the  ca.  sa.  (though  illegal)  which  she  there  sued 
out  against  Barker. 

Saver  and  Gly?i  in  support  of  the  rale,  insisted,  that  this  would  have  been  allow- 
ed had  the  intestate  been  living  ;  and  the  same  rule  will  hold  for  the  administra- 
trix.— That  there  is  no  reason  to  preclude  this  motion  now,  because  the  debt  was 
not  pleaded  or  set-off  at  the  trial.  In  Thrustout  on  the  demise  of  Barnes  and  Crafter  m 
this  court  last  Trinity  term,  the  costs  of  one  judgment  of  non-suit  m  this  court 
were  ordered  to  be  deducted  out  of  the  debt  and  costs  of  another  judgment— and 
this  court  will  also  take  notice  of  judgments  in  other  com-ts,  as  by  staying  proceed- 
ings  in  eiectmer.t  here,  till  costs  of  nonsuit  in'  ejectment  in  the  King's  Bench,  arc 
paid.  Nor  can  there  be  anv  devastavit;  for  this  money,  if  stopped  by  the  com-t  will 
never  come  to  5 flrier'.?  hands.  And  it  is  impossible  to  suppose,  that  any  court 
can  determine,  that  a  taking  on  a  void  ca.  sa.  is  satisfaction  of  the  debt. 

Be  Grey,  chiei'justlce.  This  case  is  singularlv  circumstanced.  Each  party  is  en- 
titled to  an  exec\ition  against  the  other.  The  question  is,  whether  tins  court  ^vlU 


APPEXDIX.  9 

narrow  the  plslntiflT's  execution  here,  because  she  is  liable  to  tlie  defendant's  ex- 
ecution for  a  less  sum  in  unotlier  court. 

The  cununon  law  was  very  nan-ow  in  its  principles  with  respect  to  stoppag'e  or 
set-otls  :  very  dirtcrent  from  the  J'onian  law  of  compensation,  wliich  proceecleil  on  a 
more  liberal  plan.  This  our  courts  of  equity  adopted,  made  just  allowances  to 
each  side,  and  struck  the  balance,  ^fj's  and  WcjoJ  2  IFms.  128.  But  tlicre  was 
not  any  Icijal  interposition  of  tliis  kind,  till  the  barikrupt  laws,  4  Si  5  Ann.  5  Geo.  1. 
and  5  Gio.  2. 

The  statute  2  Gsn.  2.  allowed  set-ofT  to  be  ])leaded  or  given  in  evidence  at  the 
trial.  In  tlic  constructitJiiof  this  statute,  l.oid  Hard'xickc,  Chief  Justice,  dlflired 
from  Eyre,  Chief  Justice,  with  reg-ard  to  setlinsj-olf  debts  of  superior  nature  against 
inferior,  and  vice  vctsa.     Tliis  occasioned  the  stat.  8  Geo.  2. 

The  courts  have  g-one  a  little  furtlier  tiian  the  letter  of  tlie  statutes,  by  the  rule 
of  anulogv,  in  cases  witliin  their  ]3ower.  Costs  have  been  long  set-off  against  costs  \ 

and  in  Barnes  and  Crofter  the  court  allowed  costs  to  be  set-oO' against  i/fZ)?  and 

cotts.  The  present  case  goes  a  step  fai-thcr  ;  it  is  an  application  to  us  to  restrain  and 
narro'iu  our  own  ))rocess  i?f  execution,  by  tlic  same  ecjuitable  rule.  Doubtless  this 
judgment  in  the  King^s  Bench  might  ha^■e  been  pleaded  or  given  in  evidence.  But 
that  is  no  reason  why  we  should  not  allow  it  now  ;  and  no  miscliief  can  follow 
from  allowing  it.  ^o  de'castaiit  cun  happen,  unless  tlie  plaintilfi?(;r/'er  knows  of 
any  superior  debt  ;  and,  if  she  knows  it,  she  might  disclose  it  and  siiew  it  for 
cause.  Tiie  same  answer  may  be  given  to  the  strange  supposition  of  the  debt's  be- 
ing sati.sfied,  by  executing  a  void  ca.  sa.  for  which  Barker  has  been  amply  repaid 
in  damages.  If  it  has  been  so  determined,  siie  might  have  shewn  that  for  cause. 
I  am  theicfore  for  allowing  tlie  present  motion  ;  but  dosire  it  may  be  remember- 
ed that  this  is  a  case  of  one  judginent  against  another,  both  in  the  same  riglit  ;  and 
nvist  be  distinguished  from  setting-off  private  debts,  not  in  suit,  and  upon  whicli 
r.o  judgment  has  been  obtained. 

Could,  Justice  of  the  same  opinion. 

5/r7c-^j<o/!t',  justice  concurred.  The  courts  have  been  gradually  extending  this 
eouitable  remedy.  In  the  out-set  of  a  suit  they  compel  the  plaintiil  to  make  a  set- 
ofl'  in  the  afFiduvit  to  hold  to  bail,  and  will  not  suflerhim  to  swear  to  one  side  only 
of  the  account.  So  in  costs  at  tlie  close  of  the  suit,  the  same  reason  and  tlie  sam6 
analog\^  extend  to  set-ofl'  mutual  judgments,  and  tliereby  narrow  the  greater  exe- 
cutii)!!,  in  whatever  court  it  liappens  to  be. 

Nares,  Justice  of  the  same  opinion.  There  can  be  no  clashing  of  jurisdictions  in 
this  case,  for  we  do  not  meddle  witli  the  process  of  any  court  but  our  own. 

Ride  absolute. 

Cloister  v,  HcKvcr,  and  dvo  Oi/icrs.  M.  T.  r,9  Geo.  III.  8  Tcr.  Riju  69. 

THE  plaintiff  brought  an  action  of  trover  against  the  defendants,  whosufTcrod 
judgment  to  go  by  default,  and  on  executing  a  writ  of  enquuy  the  jury  gavt; 
40/.  damages.  After\vards  tlie  defendants  sued  the  plaintift",  and  recovered 
36/ 13o".  6J."  Whereupon  tlie  defendants  obtained  a  rule,  calling  on  the  plaintiff 
to  shew  cause  wliy  tlie  proceedings  in  tin-  former  action  should  not  be  stayed  on 
the  defendant's  undertaking  to  deduct  and  allow  to  the  ]jlalntiH'40/.  the  amount  of 
the  damages  recovered  by  him,  and  the  costs  wlien  they  should  be  ascertained  by 
tlie  Mcster,  by  entering  a  remittitur  for  the  amount  of  sucli  damages  on  the  re- 
.  ord  in  the  action  brought  i^y  the  defendants,  m\  an  aiVidavit  lliat  the  svim  of  .'>(>/. 
13*.  6r/.  (tlie  damages  recovered  by  tlie  defendants)  togetlier  with  the  costs  of  Uie 
'..Iter  action  which  had  not  yet  been  la\e«l  would,  when  taxed,  considerably  cx- 
<ecd  the  damages  and  copts  recovered  bv  the  plaintiff  aguinsl  them. 

Gibis  and  Park  now  sliewed  cause  against  that  rule.  1st.  At  all  events  the  rule 
is  too  general,  berause  tlie  plain.ill  's  aiioiney  lias  a  lien  ontlie  judgment  recovered 
by  him  for  hiscoi.ts,  which  ought  not  to  be  distiulud  in  a  dispme  l»etw<en  t)ie 
..arties.  (/.rtu',  who  was  on  the  other  side,  admitted  that  thi:)  rule  must  be  snb- 
'ectto  the  attoru-y's  lien.)  2dly.  The  defendants  are  not  entitled  to  bet-ofi'theirjudg- 
in-,uit  against  tli-t'v.hich  th<-  plaintlfi' recovered  ag:t;i>-.t  them,  b^'ainie  tbi;  ;)luliitiM: 


10  APPENDIX. 

bas  aiioUic-r  deinaiul  atjainst  Ilcver  one  of  tiu-  ilcft'M(iaiitH.(</)  In  the  case  of 
Mitchfl  \.  0!'ljield,{b)  \\]ii~:rit  tlie  plaintililiad  rccuvcred  a  jiulg-ment  ag'ainst  tlie 
Jcfciulant,  the  courl  ])ermiltetl  tlif  latter  to  set-off  ajiulgnient  wlilch  lie  had  re- 
covered ag-ainst  the  \i\-\m\\\Y  and  another  perxon  against  the  judgment  olitained  against 
him.  Then  by  a  parity  of  reason,  as  the  plaintilf  has  a  separate  demand  against 
one  of  the  defendants  in  this  case,  it  will  be  unjust  that  the  defendants  should  set- 
off their  judgment  against  tliat  recovered  by  tlie  plaintiff  without  also  taking  this 
second  deinanil  into  the  account.  This  is  an  application  to  t'le  et^uitable  jurisdiction 
of  tlie  court,  who  will  tb.crefure  be  guided  by  the  nde  that  is  adopted  in  a  court 
of  equity,    that  he  who  asks  equity  must  do  equity.     But 

Tlie  court  thought  that  this  would  be  canylng  the  rule  too  far  ;  for  that  the  ef- 
fect of  discharging  tills  rule  would  be  to  subject  the  two  other  defendants  to  the 
l)ayment  of  a  separate  debt  of  Hcvct/: 

Rule  absolute. (f) 

O'Connor  v.  Mnr/Jnj,  T.  T.  31  Geo.  III.  A.  i:>.  1751.  1  Hen.  Blacks.  657. 

A  RULE  was  obtained  by  Adair,  Serj.  to  sliew  cause  why  the  costs  ofa  non- 
suit in  an  action  (t  trover,  brought  by  Murphy,  the  present  defendant,  against 
one  O' Lough/in,  should  not  be  set-off  against  tlie  costs  of  a  nonsuit  In  this  cause  ; 
it  ajipearcd  that  the  action  of  trover  had  been  brought  for  a  ship  claimed  by 
Miirphv,  but  which  proved  to  be  the  joint  property  of  0'Co«?;or  the  present  plain- 
tliri  and  one  O'SuHiTan,  (who  were  partners  In  trade)  and  of  which  U" LmighUn 
was  the  master.     The  present  action    was  brought  by  O'Connor  as  indorsee  of  a 

iii'omissorv  note  against  Murphy  as  drawer.  In  which  O'Connor  was  nonsuited  :  and 
le  now-  made  this  application,  upon  the  gi-oimd,  that  the  action  ag-alnst  O' Lovvhllr. 
was  defended  at  the  joint  e:\pense  C)i  O'Connor  and  O' Sullivan,  and  that  O'SuUiran 
was  interested  together  with  O'Connor  in  the  promissory  note,  on  which  the  present 
action  was  brought,  Map.suali.,  Serj.  shewed  casise  ;  he  said  the  coiu'ts  had  In 
several  Instances  {d)  after  the  statute  of  set-off,  refused  to  allow  the  costs  of  one 
action  to  be  set-off  against  those  of  another  ;  and  the  reason  then  given  was,  that  It 
required  the  assistance  of  an  act  of  jiarliament  to  enable  the  defendant  in  action  to 
set-off  a  mutual  debt,  and  that  act  did  not  extend  to  the  case  of  costs.  Afterwards, 
however,  by  a  sort  of  equitable  Interpretation  of  the  statute,  the  court  allowed  tlie 
costs  of  cross  actions  to  be  setagaist  each  other.  But  they  had  never  allowed  this 
to  be  done,  whei-e  the  costs  w'cre  not  mutual  debts,  and  for  the  recovery  of  which 
there  were  not  mutuaJ  i-emcdies  :  for,  had  they  gone  beyond  that,  thev  would 
have  extended  tliis  equitable  construction  of  the  statute  furtlicr  in  a  case  for  which 
it  was  evidently  not  intended  than  in  tiu)se  cases  fi;r  which  It  was  expressly  made. 
As  G" Sullivan  did  not  join  In  the  action  on  the  promissory  note,  he  ought  not  now 
to  be  permitted  to  say  that  he  was  interested  in  It  merely  to  en.title  himself  to  thr 
benefit  of  a  set-off";  and  as  Murphy  had  a  remedy  only  against  O'Connor  for  the  costs 
of  the  present  nonsuit,  those,  costs  were  a  debt  due  from  O'Connor  alone,  and  not 
jointly  from  O'Connor  and  O' Sullivan.  Therefore,  supposing  the  costs  of  the  action 
of  trover  coidd  be  taken  as  a  debt  due  from  Murphy  to  O'Connor  and  O Sullivan 
jointly,  yet  even  then  the  costs  of  tlie  two  nonsuits  could  not  be  deemed  mutual 
debts.  This  he  said  distinguished  this  case  from  Nunez  v.  Modigliani,  ante  217, 
and  Schoole  v.  Noble,  ante  23.  Besides,  Murphy  could  not  bring  an  action  against 
O'Connor  and  O' Sullivan  \o\vAy  for  the  costs  of  the  present  nonsuit,  neither  could 
any  person  but  O" Loughlin  sue  Murphy  hv  the  costs  of  the  former  one.  Tlie  costs 
therefore  of  the  two  nonsuits  could  not  by  any  means  be  taken  to  be  mutual  debts. 
The  cases  of  Paynter  v.  Walien,  C.  B.  East'A.  Geo.  Ill  Bull.  N.  P.  179.  Pyal  v. 
Larkin,  1  Wils.  155,  and  jRidoutv.  Brough,  Covcp.  133,  shev.- that  under  the  statutes 
of  set-off,  where  the  defendant  has  an  equitable  claim  on  the  plaintiff^  however 

(a)  It  appeared  in  an  affidavit  produced  on  shewing  cause  that  Hev^er,  one  of  the 
defendants,  was  indebted  to  the  iilaiiitlfl"  in  67/.  on  two  promissory  notes  cb-awn  by 
Hevoer,  one  payable  to  the  plaintifii  and  the  other  to  Smith  and  Co.  or  order,  and  by 
them  Indorsed  to  the  plaintiff. 

(6)  Ante,  4  vol.  123. 

(c)  Subject  to  the  lien  of  the  plaintiff's  attorney ;  and  it  was  referred  to  the 
Master  to  see  what  was  the  extent  of  that  lien. 

{d)  2  St.  1203. 


APPENDIX.  11 

cJear  and  just ;  }'et  if  an  action  vill  not  lie  for  it,  at  tlie  suit  of  the  defendant  alone, 
and  //.'  his  o^cn  right,  it  caiuiot  be  deemed  a  mutual  debt,  and  therefore  cannot  be 

set-ofl'.(<^) 

Lord  Loughborough  stopped  Adair,  who  was  proing'  to  reply,  and  said,  that 
•without  any  rcg-ard  to  0'5»///t'a«'i  interest  in  the  promissory  note,  O'Connor  was 
equitably  entitled  to  the  costs  of  the  nonsuit  in  the  action  of  trover  ag-ainst 
O'L'jugh'Hn,  and  therefore  he  oup,-ht  to  be  permitted  to  set  them  oft',  as  far  as  they 
would  g'o,  against  the  costs  in  the  present  actioii. 

Rule  absolute. 

Schooley.  Mble,  Lett,  and  Byrne.   T.  T.  28  Geo.  III.  J.  D.  1788.    1  Hen. 

Blacks.  23. 

THE  plaintifi'broucfht  trespass  ag^ainstthc  defendants  for  breaking  and  entering 
his  house,  Sec.  Defendants  Lett  and  Bynw  had  suftered  judg-ment  to  go  by 
default,  yoble  went  on  to  trial,  and  obtained  a  verdict.  Damages  were  assessed 
against  Lett  wnil  Byrne  atone  halfpenny  each.  On  which,  Run.vixgtox,  Serj. 
obtained  a  rule  to  shew  cause  wliy  the  costs  which  might  be  taxed  against  Lett  and 
Bvrne  on  the  judgment  by  defudtj  and  the  damages  assessed,  shf.-uld  not  be  diduet- 
ed  out  of  tlie'  costs  taxed  to  Noble  on  the  postea,  and  allowed  to  the  plaintifls,  and 
in  the  mean  time  execution  against  th<-m  stayed. 

This  was  moved  on  an  aftidavit,  stating  tliat  the  defendants  Lett  awA  Byrne  had 
acted  under  the  authoritj  of  Noble,  wlio'liad  undertaken  to  pay  the  damages  and 
costs. 

Boxn,  Serj.  against  the  rule,  said  that  this  was  a  new  application,  and  against 
iustice,  in  as  much  as  it  tended  to  deprive  the  attorney  of  thai  lien  on  the  costs,  to 
which  he  was  legallv  intitled.     But 

The  coiu-t  licld  that  the  attorney  could  only  have  such  a  lien  on  the  costs  as  wa>; 
subject  to  the  equitable  claims  of  the  parties'in  the  cause,  and  therL-fore  maile  the 

Rule  absolute. 

Vaughan  v.  Daxnes.  2  Hen.  Blacks.  440.    //.  T.  35  Geo.  III.  A.  D.   1795. 

THE  plaintiff"  recovered  a  verdict  for  200/.  against  the  defendant  in  an  action  of 
trespass  for  taking  his  goods,  and  tlie  defendant  had  previously  obtained 
judgment  against  the  plaintift",  on  a  bond  for  2000/.  wlu)  was  surnndered  in  execu- 
tion of  that  judgment.  And  now  on  the  motion  of  Bo xd,  Serj.  a  rule  was  granted 
lo  shew  cau.se,  why  it  should  not  be  referred  to  tlu-  ]n-otlionotary  to  take  an  account 
of  the  damages  recovered  on  the  verdict  ol)lained  by  tlie  plaintiff,  and  tax  his  costs 
thereon,  and  whv  the  defendant  should  not  be  discharged  frcnn  the  payment  of  such 
damages  and  costs,  wlien  so  ascertained  and  taxed,  upon  his  entering  satisfaction 
for  the  amount  thereof  on  the  judgment  recovered  by  him,  in  i)art  discharge  of  that 
judgment.  2  Blacks.  826.  Thrustout  v.  Crafter,  ante  vol.  1.  23.  Schoolev.  Noble,  217- 
Nunez  V.  Modigliani,  657.   O'Connor  v.  Murphy.  .     .rp  «. 

Ad.\ir  Serj.  shewed  cause,  on  the  part  of  the  attorney  for  the  plaintiff,  on  .affi- 
davits, stating  that  he  had  no  fund  to  resort  to  but  tlie  sum  recovered  i)y  the  plaint ift 
for  the  pannentof  his  bill,  tlie  plaintift'himself  being  insolvent,  tlie  set-off  therefore 
ought  not' to  be  allowed,  till  the  attorney's  l)ill  was  satisfied.  He  said  tliat  \he: 
court  would  protect  an  attorney  w!io  ^^'as  their  officer,  wlio  would  <)tiierwise  be 
without  remedy,  and  tliat  in  tlie'court  of  King's  Bench  tlie  etiuilable  right  of  setting; 
off* the  sum  recovered  in  one  action  against  that  recovered  in  another,  was  always 
subject  to  the  attorney's  lien  for  iiis  bill,  for  which  he  cited  Mitchell  v.  OUlfield,  4 
Term  Rep.  B.  R.  123.  and  Morelnmls.  Lashley,  B.  R.  Trin.  34  Geo.  III.     But 

On  this  day,  after  consideration,  the  court  said  that  the  attorney's  lien  did  not 
extend  to  prevent  the  parties  in  the  cause  fnun  having  the  bene  lit  of  the  set-oil 
wliich  was  applied  for  in  this  cxse,  and  theref«»re  mudc  tiie 

Rule  absolute. 

BuLi.En,  J.  mentioned  th.at  a  similar  decision  had  taken  i^Iace  this  term  in  iho 
court  of  Chancery,  in  a  case  of  Barton  v.  Etherington. 

(rt)  But  sec  those  ca«os,  and  qu.  whether  they  support  this  pniposilion  in  its  fa 
extent. 


12  APPENDIX. 

Morland  and  Ilammersley  v.  JM^kley.   Eame  v.  Lashlcy  and  Ux.    T.  T.  54 
Geo.  III.  2  ilen.  Blacks.  441. 

BOTH  tliese  ca\ises  were  tried  at  the  sitting's  Tr.  24  Geo.  III.  TIic  first  was  an 
action  upon  the  separate  bond  of"  the  defendant ;  the  second  upon  the  joint 
bond  of  the  defendant  and  his  wife.  In  tlie  first,  the  plaintiff  obtained  a  verdict, 
and  in  the  second  was  nonsuited.  In  the  same  lerin,  Haidtrson,  on  the  part  of  the 
plaintifli  obtained  a  rule  to  siiew  cause  why  the  costs  f)f  the  nonsuit  should  not  be 
deducted  from  the  sum  given  by  tlie  verdict  in  the  first  cause. 

Pahner  shewed  cause,  contending- on  tlie  authority  of  7T//;cAe// v.  OUIficld,  4  Term 
Eep.  B.  JR.  123,  that  the  attorney  for  the  defendants  had  a  lien  on  the  judgment  for 
his  costs.  In  support  of  the  rule  Henderson  cited  Barker  v.  Braham,  3  Wlls.  396, 
and  attempted  to  distinguish  the  present  case  fi-oni  Mitchell  y.  O'.df.cld,  because 
there  were  different  attornies  in  the  differerit  causes  in  that  case,  but  here  the  al- 
toiTiey  was  the  same  in  both.     But 

Loi-d  Kexvox  said  that  circumstance  made  no  difference  between  the  rases,  and 
as  to  the  case  in  IViUon,  it  did  not  there  appear  that  any  application  was  made  on 
the  part  of  the  attorney.  That  an  attorney  had  a  lien  on  the  jud.^ent  for  his 
costs,  which  it  would  be  unjust  in  the  court  to  take  from  him.  The  ride  therefore 
was  made  absolute,  with  a  reservation  of  the  attorney's  lien.  But  as  \>\-  costs  were 
equal  to  the  costs  of  the  nonsuit,  the  rule  was  afterwards  abandoned. (^) 

Dmnie  v.  Elliott,   Hill,  and  another.    M.  T.    35   Ceo.  III.    2  Ken.  Black';. 

587.  J.  D.   1795. 

IN  this  case  a  rtile  was  granted  to  shew  cause  why  execution  for  tlie  damages  and 
costs  recovered  by  the  plaint!  H^in  this  cause,  amounting- to  the  sumof  52/.  should 
not  be  stayed,  the  defendant  HUl  undertaking  to  stay  all  proceedings  on  the  judg- 
ment by  him  obtained  in  another  action  brought  bv  the  plaintiff',  wherein  Hill  had 
his  costs  taxed  at  tlie  sum  of  43/.  19*.  3d.  and  also  undertakin.c;'  to  pay  to  tlie  plain- 
tiff or  his  attorney  the  sum  of  8/.  9d.  being  the  balance  due  to  tlie  plaintifl',  after 
setting-off  the  costs  so  due  to  the  defendant  Hill  from  the  plaintiff,  on  an  affidavit 
by  Hill,  that  the  plaintiff  aiD]ieared  to  be  insolvent,  that  his  goods  were  all  distrain- 
ed for  rent,  and  that  he  himself  was  not  to  he  met  with. 

In  opposition  to  the  rule,  Le  Blanc,  Serjeant,  produced  an  affidavit  of  tlie  plain- 
tiff, stating  that  Hill  ha.d  told  him  that  Elliot,  one  of  the  ether  defendants,  was  to 
indemnify  Hill,  as  having  acted  under  his  orders,  and  that  the  plaintiff  had  ofiered 
not  to  takeout  execution  against  /////.  The  attoi-ney  fur  tlie  plaintiff  alio  made  an 
affidavit  that  he  had  no  security  for  his  costs,  which  the  plaintlfll  was  unable  to  pav, 
and  which  he  verily  believed  he  should  lose,  if  the  set-off  were  allov.-cd,  as  he  had 
no  chance  of  recovering-  them,  but  out  of  tlie  damages  and  costs  to  be  received  un- 
der the  judgment  for  the  plaintiff. 

Le  Blanc  also  relied  on  the  practice  of  th.e  court  of  King's  Bench,  and  cited 
Mitchell  \.  OUipid,  4  Term  Rep.  B.  R.  123,  and  Randle  v.  Fuller,  6  Term  Rep. 
B.  R.  456. 

In  support  of  the  rule,  B,jnd,  serjeant,  insisted  on  tl.e  knov.n  prrctice  in  this 
court,  that  the  attorney's  lien  for  liis  costs  was  subject  to  tlie  equitable  claims  of 
the  parties  In  the  cause,  which  he  said  was  settled  in  the  cases  of  Schoolew  Noble, 
ante  vol.  1.  23  ;  Nunez  v.  Modi^licini,  217 ;  O'Connor  v.  3Iurphy,  657 ;  t.nd  Vaugltan 
V.  Davies,  vol.  2.  4'10.  , 

The  court  hekl  the  practice  liere  to  be  clearly  established  by  those  cases,  what- 
ever might  be  the  rule  in  the  King\-  Bench,  and  therefore  tliat  it  was  not  now  to  be 
disputed. 

Rule  absolute. 

Hallx.  Odij,  2  Pull,  and  Bos.  20.  M.  T.  40  Geo.  III.  A.  D.  1799. 

COCKELL,  Serjeant,  this  day  shewed  cau.se  against  a  rule  nisi,  f^r  setting-off 
the  costs  of  an  action  of  ejectment  recovered  by  the  present  defendant,  against 
{he  present  plaintiff  in  the  King's  Bench,  against  the  costs  of  an  action  of  trespass  Ik 

(a)  See  also  6  Term  Rep.  B.  E.  455.  Randle  v.  Fuller. 


APPENDIX,  15' 

tbi?  court,  in  which  the  plaintifT  liad  recovered  ft  verdict ;  and  insisted  that  in  all 
the  cases  where  a  set-ofi"  ni'ihis  kind  liad  been  allowed,  both  actions  had  been  in 
the  same  court ;  as  in  Thrustoutd.  Barnes  v.  Crofter.  2  Blach.  526.  Sc/wole  v.  Noble  and 
otlieis,  1  Hen.  Blach.  23.  Nunez  v.  Modigliani,  1  Hen.  Blacks.  217-  Vaughan  v.  Da- 
vies,  2  Hen.  Blacks.  440,  and  Dennie  v.  Elliot,  2  Hen.  Blacks.  537.  But  the  court  ovci'- 
ruled  t!ie  objection,  saying-  that  a  set-ott'had  even  Ijeen  allowed  l)etween  costs  in  a 
C(>iiit  of  equity,  and  costs  in  a  court  of  law;  and  Heath,  J.  observed  tliat  he  re- 
Hiembered  a  case,  where  an  ejectment  liaxinj^  been  broiif;;ht  in  the  Kings  Bench, 
and  afterwards  a  formedon  in  this  court,  proceeding's  were  &ta3-cd  in  tlic  latter 
until  the  costs  of  the  former  were  paid. 

Cockell,  Serjeant,  then  stated  that  lie  opposed  the  rule  on  the  part  of  the  ])lain- 
(ifl's  attorney,  v%h(i  had  not  been  paid  his  costs,  and  represented  that  the  plaintiff 
himself  was  now  in  prison.  He  cited  Mitchell  v.  Oldfcld,  4  Term.  Rep.  123,  to 
sJiew  tliat  the  attorney  had  a  lien  on  the  judj^-ment  for  the  amount  of  his  costs. 

ShepherJ,  Serjeant,  contra,  relied  on  Dannie  v.  Elliot ;  where  it  was  held,  that 
whatever  niiifht  be  tlie  rule  in  the  King's  Bench,  yet  according-  to  the  practice  of 
this  court,  the  lien  of  the  attorney  was  subject  to  the  equitable  claims  of  the  jiai-ties. 

ioriEi-DON,  Chief  Justice,  finding-  it  to  be  the  pi-acticeof  this  court  that  an  at- 
torney shall  not  take  his  costs  out  of  the  fund,  which  by  his  diligence  he  has  re- 
covered for  his  client,  where  tlie  opj-.ositc  party  is  entitled  to  set-oft',  it  docs  not 
become  me  to  s.iy  more  that  I  find  it  to  be  the  settled  practice  with  much  sur- 
prise, since  it  stands  in  direct  contradiction  to  the  practice  of  every  other  court,  as 
well  as  to  the  principles  of  justice.  In  the  court  of  Chancery  the  same  parties  are 
often  concerned  in  many  suits  ;  and  1  nevtr  knew  the  idea  entertained  of  arrang-ing- 
the  fimds,  till  the  respective  attornies  were  paid  their  costs.  However,  as  the  at- 
torney in  this  case  has  acted  with  a  knowledg-e  of  the  settled  j)ractice  of  ;hc  court, 
he  can  have  a  rig-ht  to  claim  the  advantage  of  a  more  just  princijjle  ;  and  it  will  only 
remain  for  the  court  to  consider,  whether  tlte  practiee  of  the  coiu-t  oi' Kir.g^s  Bench 
should  not  be  adopted  here  for  the  future. 

Heath,  J.     I  have  no  objection  to  have  tlio  practice  reconsidered. 

RooKE,  J.  There  can  be  no  objection  to  reconsidering  the  ])raclice  ;  but  it 
<loes  not  appear  to  me  to  be  unfair  as  it  stands  at  present.  The  attorney  looks  ill 
the  first  instance  to  the  personal  security  of  his  client,  and  if  beyond  that  he  can  get 
any  fmtlier  scciu-ity  into  his  hands,  it  is  a  mere  casual  advantage. 

Rule  absolute. 

Mitchell  V.  ClOJield.  H.  T.  31  Geo.  III.  .-/.  D.  1791.  4  Term.  liefi.  123. 

IN  this  action  the  plaintiff  recovered  a  judgment  ag-ainst  the  defendant  for  182/. 
\0s.  But  the  defenrlant,  having-  also  recovered  in  anf)ther  action  against  this 
plaintiff"  and  another,  obtained  a  rule  to  shew  cause  why  the  debt  and  costs  in  the 
latter  should  not  be  set-oft'  against  the  judgment  in  the  foriFier  action;  t.nggeslinjf 
(among-  other  reasons)  that  Mit:hell  had  absconded. 

Bearcrrf:  now  shewed,  on  behalf  of  Mitchells  attorney  in  the  first  action  ;  eon 
fenfling-tliat,  as  he  v,-as  not  concerned  as  attorn<-y  in  the  other  aetion,  he  ha<l  a  lien 
for  his  costs  on  the  judgment  obtained  by  bis  client.  He  also  liint(-d  that  ijrrhaji.s 
the  court  would  not  interfere  at  all  in  this  case;  inasmuch  as  one  <U  bt  wa..  due  to 
the  plaintiff  alone,  whereas  the  other  was  the  joint  d(  btofthe  plaintiff" runl  another 
to  the  defendant ;  and  he  observed  that  this  was  nut  sucii  a  debt  as  could  lie  set-eifl 
under  tlie  statute.     But, 

Lord  Kes-yo.v,  Ch.  J.  said,  tliat  this  diil  not  d-pend  on  the  statutes  of  set-off. 
but  OJi  the  g-eneral  jiu-isdiction  of  th<-  eourt  over  the  suiiors  in  it  ;  ihat  it  was  uii 
equit-ible  part  of  their  jiirisdietlon,  and  had  been  fre(|Uently  exrrciscd.  Bui,  as  to 
the  otlier  point,  he  obs*  rved,  that  the  attornies  and  .solieilors  of  the  <lill"erent  eourls 
have  a  li(-n  on  all  papers  in  their  han(K-,  and  judgments  rtcoveretl,  for  their  costs; 
that  in  the  court  of  Chancery  they  w(  re  permitt(  d  to  retain  title  deeds  for  that  pur- 
(>ose(a)  ;  and  he  thoug-hl  it  right  that  the  allorn<-y  in  this  ease  should  be  satisfied 
for  his  costs  before  the  defendant  was  allovv<  il  to  make  the  set-(j(r. 

BuLLEB,   J.— Thou;,'h  tliis  court  have  said  that    tliry  villiv/t  iniTfcrc  on  ihc 

(<f )  /7  /f  ar.'.e,  '\  -.■o!.  27'> 


14  APPENDIX. 

behalf  of  the  attoriipy,  and  prevent  the  plamtiff  settling' his  own  cause  without  first 
paying  the  attorney's  bill(o)  yet  wlie.n  the  adverse  party,  against  whom  a  judg- 
ment has  been  obtained,  applies  to  get  rid  of  that  judgment,  the  court  will  take 
ciu'e  that  the  attorney's  bill  is  satisfied. 

The  court  made  the  rule  absolute,  on  the  defendant's  undertaking  to  pay  the  at- 
torney's bill,  and  on  his  entei'ing  a  remittitur  in  the  cause  in  whicli  this  defendant 
\\a.s  plaintiff.  (<-■) 

Randlev.  Fuller,  M.  T.  36  G.  III.  A.  D.  1795.  6  T.  R.  456. 

A  RULE  was  obtained  to  shew  cause  Avhy  the  master  should  not,  upon  taxation 
of  the  costs  in  this  cause,  set  off  tlie  sum  of;"!"/.  3.i-.  6(/.  against  such  costs  as 
should  vipon  taxation  be  found  due  from  the  defendant  to  the  phiintilf,  and  if  more 
should  be  found  due  to  the  plaintiff  than  that  sum  then  wliy  u]5on  payment  of  the 
balance  execution  should  not  be  stayed.  This  was  founded  upon  an  aftidavit  stating 
that  tlie  above-mentioned  sum  was  due  from  tlie  plaintiii'  to  the  defendant  upon  a 
judgment  in  a  former  action;  and  that  the  plaintiff  had  already  received  part  of 
his  debt  under  an  execution. 

Shepherd  shewed  cause  upon  an  afiidavlt  of  the  plaintiff's  attornej-,  claimingallen 
upon  the  costs  and  damages  recovered  in  the  present  action,  and  requiring  to  have 
such  lien,  which  amounted  to  more  than  the  sum  demanded  by  the  defendant,  to  be 
set-off,  satisfied  in  the  first  instance  ;  and  stating  furtlier  that  the  plaintiff'  had  ab- 
sconded, and  that  the  attorney  had  no  other  securitj^  for  his  bill  than  the  costs  and 
damages  recovered.  He  contended  that  the  practice  of  tlie  coui-t  permitting  a  set- 
off in  such  cases  as  the  present  was  never  enforced  adversely  to  tlie  attorney's  lien 
if  insisted  upon  by  him;  and  that  injustice  it  ought  not  to  be  extended  furtlier,  as 
the  attorney  wlio  had  been  at  the  trouble  and  expense  of  prosecuting  a  suit  ought 
not  to  be  in  a  worse  situation  because  his  client  was  liable  to  otlier  demands  on 
other  accounts  than  those  inchidcd  in  the  suit  prosecuted  by  such  attorney.  And 
he  referred  to  Mitchell  v.  Oldfield{a) 

Vaughnn  in  support  of  the  rule  said  that  the  principle  had  been  laid  down  in  the 
court  of  Common  Pleas  to  be  that  the  attorney  had  only  a  lien  subject  to  the  equi- 
table claim  against  his  client ;  if  therefore  the  jjlaintifl'hcre  could  only  conscientiously 
recover  the  balance  as  between  him  and  the  defendant  wlio  had  a  cross  claim  upon 
him,  tlie  attorney  ought  not  to  stand  in  a  better  situation  than  his  principal,  and  still 
less  ought  he  to  prejudice  the  rights  of  the  defendant  as  against  the  plaintiff  in  the 
cause.  And  he  cited  Thrustoiu  d.  Barnes  v.  Crafter{b)  Schoole  v.  Noble{c)  and 
Nunez  y.  Mfjligliani^d)  as  shewing  the  practice  in  tlie  Common  Pleas  ;  and  Welch 
V.  Ifole(e)  where  tliis  court  refused  to  obllg'e  the  defendant  to  pay  the  attorney's 
demand,  the  defendant  having  compromised  his  debt  with  the  plaintiff"  without  the 
attorney's  knowledge. (/" ) 

The  court  desired  the  matter  to  stand  over  for  fm'ther  inquiry ;  and  on  this  day, 

Lord  Kenvon,  Ch.  J.  said — It  had  been  expressly  determined  in  Mitchell  v. 
Oldjield  that  the  atto!-ney  had  a  general  lien  on  the  costs  and  damages  recovered, 
without  any  such  restriction  as  was  now  attempted  to  be  put  upon  it ;  and  that  upon 
the  reason  and  justice  of  the  case  he  could  find  no  ground  to  impose  such  a  restric- 
tion. That  whatever  might  be  the  practice  in  tlie  coiu'tof  Common  Pleas,  he  was 
glad  to  find  that  his  opinion  was  warranted  by  the  settled  practice  of  this  court. (^) 

Rule  discharged. 

Sa/isford  v.  Fletcher,  H.  T.  32  Geo.  III.  J.  D.  1792,  4  T.  ie.  511. 

REPLEVIN  for  taking  goods  in  the  plaintiff's  dwelling  house.  Avowry  for 
50/.  rent  due  at  Christmas  1790  from  Brookes  to  Fleicher''s  testators  for  this 
house ,  another  avowry  for  the  same  rent  due  at  the  same  time  from  the  phiintiff  to 
the  defendant's  testator.     Pleas  in  bar,  first,  as  to  20/.  (parcel  of  the  50/.)  nothing 

"      (/>)  Vid.  Welch  V.  Hole,  Dougl.  226,  and  Griffin  v.  Eyles,  Hen.  Blach.  Pep.  C.  B.  122- 
(c)  See  Scad  v.  Di/ppcr,  post,  6  vol.  361,  and  Randle  v.  Fuller,  post,  6  vol.  456. 
(fl)  Ante,  4  vol.  123.  (e)  Dougl.  238.  3d.  edition. 

lb)  2  Black.  Sep.  826.  (/)  Vide  Sead  v.  Dupper,  ante,  361. 

(c)  1  Hen.  Black.  Rep.  23.  (^)  Morland  v.  Rashleigh,  Tr.  35  G.  3- 

{d)  lb.  217.  B.  R.  S.  P. 


in  an-ear  ;  2clly.  As  to  30/.  tlie  residue,  a  tender  and  no  subsequent  demand  ;  Sdly, 
"  Tliat  WiUiam  Fietchtr  (deceased)  in  his  life -time  and  at  the  time  (  f  liis  death, 
"  and  tlie  said  William  Fletcher  (the  defendant)  from  tiie  time  of  his  deatli  until 
"  and  at  the  same  time  when,  &c.  held  the  said  dwelling- house  in  which,  &c. 
*'  with  the  appiu'teniuices  as  tenants  thereof  to  the  Duke  o\'  Portland,  at  and  under 
*•  the  vearlv  rent  of  5/.  of  lawful  money  o'(  Great  Britain  to  be  paid  at  the  four  most 
"  usual  feasts  or  days  of  payment  of  rent  in  tlte  \ear,  that  is  to  say,  Sec.  by  even 
'•  and  equal  portions.  And  th.at  l^efore  the  s.'iid  time  \\  hen,  &.c.  2t)/.  of  tlie  said 
"  last  mentioricd  rent  for  four  years,  endinp^  at  the  feast  of  the  Nativity  of  om-  Lord 
**  Christ  1790,  became  due  and.  in  arrear  from  the  said  William  Fletcher  (the  do- 
"  fendant)  to  the  said  Duke.  And  thereupon  the  said  Duke,  at  the  said  feast  of, 
**  Sic.  demanded  payment  ef  the  arrears  of  the  said  rent  from  the  said  W.  Fletcher, 
"  (the  defendant)  but  the  said  W.  Fletcher  then  and  tliei  e  refused  to  pay  the  same  ; 
"  whereupon  the  said  Duke  afterwiu-ds,  and  bef  re  the  said  time  when,  &c.  de- 
"  mandcd  the  payment  of  tl\e  said  arrears  of  rent  ii-om  the  said  ir.  Brookes,  a.s  the 
"  occupier  of  the  said  dwcllin;^  house,  and  threatened  to  distrain  ujxjn  the  jjoods 
"  and  chattels  in  ajid  upon  the  said  dwelling-  house  and  premises  ;  whereupon  the 
"  said  W.  Broohes,  in  order  to  prevent  the  said  i;-oods  and  chattels  in  and  ujion  iho 
"  said dwellinp*  house  and  premises  from  being'  <listrained,  long-  before  the  s:'id  time 
•'  when,  &c.  to  wit,  on  the  25th  day  December  1790,  paid  to  the  said  Duke  the 
•*  said  20/.  the  rent  aforesaid,  so  being  in  arrear  and  inipaid  as  aforesaid  ;  and  so 
•'  the  plaintiff  says  that  nothing-  of  tlie  said  20/.  of  the  rent  aforesaid  was  in  arrear 
"  to  the  said  W' Fletcher  (tlie  defendant)  in  iv.anner  and  form  as  tlie  said  W. 
"  i^/e/^r/iO"  (the  defendant)  hath  above  in  liis  said  avowry  alleged;  and  this  the 
"  plaintiff,  &e.  wlicrefore,"  &c.     A  similar  ])lea  to  the  last  avowry. 

To  both  these  there  was  a  general  demurrer. 

Chainhre,  in  s>i])port  of  the  demurrer,  urged,  that  the  ]ika  in  bar  was  no  answer 
to  the  avowrv,  for  thoug-h  it  was  not  pleaded  in  form  as  a  set-oft,  it  was  so  in  ef- 
fect; and  it  has  been  held  tlnitthc  statutes  of  .set-oil'  do  not  extend  to  a  replevin. 
Absolovi  v.  Knight.{a)  Neitiier  can  the  payment  of  a  debt  of  the  avowant  be  con- 
sidered as  payment  of  rent,  so  as  to  prove  the  plea  that  notliing  is  in  arrear.  The 
plaintitf,  having-  stated  the  special  grounds  from  wliieli  he  draws  the  conclusion  that 
nothing  is  in  arrear,  cannot  be  jK-rmitted  to  r(  sf)rt  to  other  gnninds  to  su])port  it. 
Now  the  circumstances  here  pleaded  at  the  most  only  amomit  to  this,  that  the  avow- 
ant has  contr.acted  a  debt  with  him  ;  for  the  relation  in  which  be  stands  to  the  plain- 
tiff cannot  vary  the  case.  It  does  not  appear  that  the  avowant  had  anv  notice  that 
the  plaintiff' had  paid  the  ground-rent;  and  no  person  can  be  allowed  to  charge 
another  with  a  debt  against  his  consent,  or  without  his  knowledj^^e.  This  there- 
f)rc  cannot  be  considered  as  a  payment  for  the  avowant,  because  the  pla'mliif  was 
not  authorised  In  make  it.  But  even  if  it  Iiad  bef-n  paid  witli  tiie  avowant's  ediiseiit, 
and  he  had  afterwards  rei);iid  the  ])laintiff,  the  former  might  have  avowed  for  tiic 
whole  rent  in  arrear;  and  \v\  if  it  could  have  been  considered  as  part  jiayment  ol" 
the  rent  bv  tlie  tenant  at  first,  the  dc  fendant  could  not  afterw  ards  have  avowed  for 
that  part  of  the  rent  ;  and  it  is  not  alleged  in  the  i)lea  that  the  defendant  has  not  re- 
paid him.  In  all  the  land-tax  acts  a  special  provision  is  made  to  enable  the  tenant 
to  deduct  the  land-tax  which  is  a  charge  \\\wn  the  land,  out  of  the  rent  to  be  |)aitl 
to  the  landlord  :  tiiis  furnishes  a  strong  argument  tosliewthat  in  the  eontemi)lali()n 
of  the  legislature  paying  the  land-tax  by  the  tenant  would  not  have  been  consider- 
ed as  i>arl  payment  of  tile  rent  to  the  lessor,  othcrwi.sc  it  would  have  been  iniga- 
tory  to  have  inserted  this  clause  in  those  acts. 

Lord  Kii.NVOv,  Ch.  J. — It  is  incumbent  on  a  party,  who  wi.shcs  to  establish  a 
point  contr:irv  to  all  justice  and  e(|uity,  to  produce  some  direct  airthorlty,  shewing 
that  there  is  an  inflexible  rule  of  law  established  in  opposition  tc  justice  :  but  nu 
huch  authority  has  iieen  ])roduced  by  the  defendant  to  support  hit  claim.  Tlif  ge- 
neral  principles  that  have  been  relfed  on  in  the  argument,  tiiat  .1  set-olfcunnot  be 
pleaded  to  an  avowry  for  rent,  and  that  no  person  can  make  another  his  tU-btor  by 
vohmtarilv  paving  the  debt  of  that  other  ])erson  against  his  con<>nt,  are  not  jpus- 
lioiK  (1.  With  regard  to  the  first,  it  is  nuKJi  to  be  i.-imenled  that  it  siiouhl  have  bc-en 
ao  decided  ;  however,  for  the  sake  of  certainty  in  the  law,   we   must  sui)mit  ti> 

{a)  Barnes  450.  4to  edition,  and  BmII.  N.  P  IHl.  Grahaiv  V.  Fraine,  II  24  C  ? 
B    H.  and  Laycock  y.  'ftiffnd,  F..  27  G  2.  li.  R.  S   1' 


iO  APPENDIX. 

those  (Iccislons,  till  tie  leg'islaturc  alter  the  law.  But  this  is  not  across  demand  ■ 
the  ground-i-fnt  paid  by  tlie  plaintiff' was  in  dischai-s>-e  of  a  demand  superior  to  the 
improved  rent ;  it  wfi.s  the  tir.st  charg'e  from  v.'liicli  tlie  defendant  was  to  exonerate 
himself  before  he  piijt  any  of  t!ie  rent  due  from  the  plaintiti'  into  his  own  jjocket 
Tills  was  a  payment  in  respect  of  the  occupation.  And  to  the  other  position  I  i)er  - 
fectly  subscribe  ;  Ijiit  it  cannot  i^'overu  this  case.  Here  tlie  plaintiti  was  sub-teuant 
to  an  estate  of  the  defendant's  iield  under  tlie  Duke  oi Portland ;  the  i^round-rent 
being-  in  arrcar,  the  Duke  of  PurtlaiKPs  ag-ents  ap-plied  to  the  plaintiti  fcr  j;;  yrnent, 
which  they  had  it  in  their  power  toenforce  by  distress  ;  and  they  even  th;  eater.ed  to 
do  so  ;  it  was  therefore  hy  coinpulsion  that  the  plaintiti' paid  this  mor.ey,  wliicl)  w;is 
due  in  repect  of  the  very  property  whicli  he  held  as  tenant  to  the  defendant,  -..nd 
of  the  same  property  for  whicli  this  distress  was  made.  This  then  is  clearly  dis- 
tinpfuishable  from  the  case  of  a  voluntary  payvicnt  made  to  charg^e  another  person 
with  a  debt  ag-ainst  his  consent.  And  now  the  defendant  ins.sts  that,  thouc,h  .dl 
this  property  was  liable  to  tlie  i^-round-rent,  and  thoug-h  this  was  the  first  chaig-e  (,a 
the  land,  he  is  to  i-eceive  the  whole  of  the  reserved  rent  from  the  plaintilt,  without 
making  any  deduction  from  the  grotmd-rent.  But  a  more  unconscientious  prcj;o- 
sition  Wiis  never  stated  in  a  coiU't  of  justice. 

BuLLER,  J.  («) — There  is  a  g-rciit  diilerence  between  a  payment  and  a  set-ofi'; 
the  former  may  be  pleaded  to  an  avovvry,  thoug-h  tiie  latter  cannot.  That  is  a  good 
pavment  wliich  is  paid  as  part  of  the  rent  itself  in  respectof  the  kind  :  but  a  set-oft' 
supposes  a  different  demand,  arising-  in  a  diHl-rcnt  right.  A  case  put  at  the  bar  ad- 
mits of  a  decisive  answer  :  it  was  said  that  if  the  tenant  had  paid  the  g-round-rcnt, 
and  the  defendant  had  afterwards  repaid  him,  the  latter  could  not  avow  for  the 
•whole  rent;  but,  whether  the  payment  of  a  sum  of  money  is  to  be  considered  as  a 
payment  by  one  person  for  the  debt  of  another  must  depend  on  the  will  and  consent 
«f  both  pai'ties  ;  and  if  it  be  once  considered  by  both  as  payment,  tlie  debt  cannot 
afterwards  be  revived.  And  my  answer  to  the  case  supposed  is  this,  that  the  pay- 
ment there  never  was  considered  by  both  as  a  payment ;  and,  if  not,  the  whole  rent 
remains  due.  I  consider  this  case  as  a  lease  by  tlie  defendant  to  tliC  plaintitt'at  tiie 
annual  rent  of  50/.  out  of  which  51.  per  anr.iim  vvas  to  be  paid  to  the  g-ronnd-Iai id- 
lord  ;  and  therefore  apayment  of  that  g-round-rcnt  is  a  payment  of  so  much  rent  to 
the  defend-mt,  an.d  may  be  pleaded  in  answer  to  the  avowry  for  rent.  Neither  can 
wa  suppose  upon  this  record  that  the  defendant  ever  repaid  the  plaintiff  this 
ground-rent ;  for,  if  lie  had,  he  mi,£^ht  have  replied  that  fact. 

Grose,  J. — The  principles  relied  on  by  the  defendant's  counsel  are  not  disputed, 
but  they  are  not  applicable  to  this  case  .It  must  be  admitted  that  a  plaintiti' cannot 
olead  a  set-ofl"  to  an  avowry  for  rent,  and  that  one  person  caiinot  make  another  his 
debtor  by  a  voluntary  ]myment.  But  tliis  is  neither  the  one  nor  the  other.  It  is  a 
compulsory  payment  made  by  the  plaintiff  to  ]jrotect  him  from  a  distress  for  tlie 
g-round-rent  due  to  the  original  landlord. 

Judg-mcnt  fir  the  plaintiff. 

Ord  V.  Rus/iim,  T.  T.  'Z7  Geo.  III.  2  Es/i.  Cas.  569. 

A  SSUMPSIT  on  a  bill  of  exchange  accepted  by  the  defendant,  which  was  due 
uTX.   some  time  in  the  year  1784. 

Pleas.     Non-assumpsit,  Statute  of  Limitations,  and  a  Set-off. 

rhe  set-oif  consisted  of  bills  of  exchange  and  promissory  notes  of  the  plaintiff's, 
wliich  the  defendant  had  taken  up  or  paid  on  his  account ;  they  were  all  dated  in 
the  year  1784. 

tWo  objections  were  made  to  the  set-off. — First.  Thatinorder  to  entitle  tlie  de- 
fendant to  go  into  evidence  respecting  those  bills  and  notes,  they  ought  to  liave 
been  made  the  special  objects  of  a  set-off. 

Loi'd  Kenyon  overruled  the  objection,  and  held,  that  they  were  good  evidence 
under  the  count  for  money  paid  to  the  plai-atifi"'s  use. 

The  second  objection  was,  that  though  the  idaintiff's  demand  against  the  de- 
fendant had  accr'.icd  so  far  back  as  the  year  1784,  yet  in  fact  he  had  kept  it  alive 
by  having  sued  out  process  within  the  six  years,  and  continued  it  ;  but  that  as  the 
defendant  had  not  done  so,  his  demand  against  the  plaintiff  must  be  held  to  be 
ban-ed  by  the  statute  ;  and  so  not  such  as  could  demand  a  set-off. 

(a)  Abs.  Ashhurst,  J. 


APPENDIX.  17 

Lord  Ken'yon-  said,  that  as  the  transactions  heUvcen  tho  plaintiff  and  the  defen- 
dant W"  re  all  of  the  same  date,  and  as  the  bills  seemed  to  have  been  «;ivcn  In  the 
course  of  those  transactions,  and  for  their  mutual  aeconiniodation,  it  woukl  be  the 
hic'iK-'St  iiijiistiee  to  alknv  one  to  have  an  operation  \>y  law  and  not  the  other,  and 
that  he  would  therefore  hold  the  latter  to  bo  c^ood  as  well  as  the  former,  and  sutler 
tliemio  be  sot-oft'. 

Ti'.e  defendant  proved  the  payment  of  the  bills  and  notes  as  a  set-ofT,  and  had  a 
verdict. 

JDunmorew  Taylor^  H.  T.  ?A  Geo.  III.  Pcakc  41. 

ASSUMPSIT  for  pj-oods  sold  and  delivered.  Set-off  for  goods  sold  and  deli- 
vered, and  also  for  goods  hargair.ed  and  sold. 

Oil  tlie  cross  examination  of  the  plaintiff's  witness  it  appeared  that  the  defendant 
had  made  a  wagp;-on  for  the  plaintiff,  but  had  refused  to  deliver  it  unh-ss  the  plain- 
tiff v.'ould  get  some  person  to  join  him  in  giving  a  security  for  the  balance  which 
the  delivery  of  the  waggon  would  make  in  his  favour.  The  plaintiff  was  then  in- 
solvent. 

It  was  objected  that  this  contract,  being  only  executory,  could  not  be  made  the 
subject  of  a  Ket-oif. 

BiLLER,  J.  tlicught  it  could  be  set-off  as  goods  bargained  and  sold.  When  the 
cause  had  proceeil'^d  further,  it  appeared  that  ii  was  afterwards  agreed  that  the 
phiintHirtliould  noi  iiiive  the  waggon,  but  that  the  defendant  should  keep  it.  Upon 
v.-iilch  tlic  plaiutifrhad  a  verdict. 

Ncjtc.  After  liic  cause  was  over  Mr.  J.  Bulhr  said  th.ithc  thought  an  indebitatus 
ajium/isit  would  lie  in  this  case,  but  that  there  was  some  nicety  in  the  question. 

Freeman  v,  Hyatt,  M.  T.  Geo.  III.  K.  D.  1  Blacks.  39  i. 

ACTION  for  money  due  for  a  parcel  of  cloth.  Dunning  moved  to  stay  the  trial 
of  tlie  cause,  in  order  to  send  a  commission  into  Portugal,  to  establi.'sh  a  fact 
by  way  of  set-olf;  viz.  That  in  a  former  parcel  of  cloths,  sent  to  Portugal,  .iiul 
bought  of  the  same  plaintitt",  it  appeared  on  opening  the  bale,  that  they  were  burnt 
in  the  pressing,  wliich  had  greatly  lowered  tlieir  value. 

Nortony  Solicitor-General,  objected,  that  the  set-ofl' was  not  maintainable. You 

migiit  as  well  set-off  the  damages  which  you  are  entitled  to  recover  for  a  lj.attery. 
You  should  bring  your  special  action  on  the  case  : 

And  of  that  opinion  was  the  court,  and  denied  the  motion. 

ILivlet  and  Jnothcr  V.  Utrickland^  E.  T.   14  Geo.  III.  A.  D.  1774.  B.  R. 

CoTJji.  56. 

THIS  was  .in  action  of  covcnnnt.  The  defendant  pleaded  th.nt  he  had  sustained 
gi-e ate r  damages  by  reason  of  the  breaches  conunitted  on  the  part  of  the  plain- 
tiff, th.an  tlie  value  of  the  damages  sustained  by  the  ])laintift'  on  accoimt  of  the 
bieacFies  alleget!  in  the  declaration  :  all  the  breaches  assigned  in  the  plea  were  for 
uon-delivcry  of  alium  in  due  time.  The  plaintifidenuuTed,  and  for  special  cause 
assigned,  that  it  was  i.ot  eomi)Ctent  to  the  defendant  to  pU  ad  these  damages  by  way 
'.r.vt-off. 

Mr.  Chamiri-  for  the  phiintiff.  The  covenant  is  not  for  money,  therefore  the 
Mi.niages  cannot  be  set-ofl",  either  by  stat.  2  C.  2.  c.  22.  or  8  G.  2.  c.  24.  For  they 
are  not  d'bts,  nor  rccovcruLle  as  sucti.  A  tender  is  (*nly  pleadable  to  an  action  of 
contract  for  monf-v. 

Ill  no  part  of  tli'c  plea  is  it  alleged,  that  these  are  mutual  debts.  Rut  further  '\\\ 
this  case,  the  dam.ages  to  be  recovered  ujmn  the  covenant  are  totally  imrerlain  ;  the 
measure  of  them  depemling  upon  the  discretion  of  the  jury.  It  is  im()ossible  iherc- 
fore  for  the  p.iiiie.s  to  aflix  .any  prt  cise  balance  ;  cons<(juently  the  act  of  iiarlianuiit 
(.annot  extend  to  them.  If  the  constnu  tion  which  is  contend<<l  for  on  the  other 
.side,  is  to  prevail,  daniagcH  upon  a  breach  of  marriage  contract  niiglit  k-  in.sisled 
upon  as  debt^  :  and  tli'  ■  tine  n.i  fining  migh'  cM- ml  totti'.-  srttin!7-off  dainagcH  in 
I]  action  of  UOV<y 

( 


ib  APPENDIX. 

Mr.  Serjeant  IValksr  ior  the  defendant.  By  stat.  2  G.  2.  c.  22.  a  defendant  is  at 
liberty  to  set-ofiany  demand  that  he  may  have  against  the  plaintiff;  or  to  plead  it 
i\i  b;u'  as  the  nature  of  tlie  case  may  require,  and  by  stat.  8  G.  2.  c.  24.  this  power 
IS  extended  to  debts  of  a  ditlerent  nature. 

The  present  action  is  an  action  foi- damages,  and  the  set-off  is  of  the  same  nature 
as  the  demand  ;  viz.  unliquidated  damages  :  the  verdict  therefore  will  decide  the 
balance.  The  uncertainty  of  the  damages  cannot  be  a  foundation  for  the  distinc- 
tion insisted  on  :  for  the  words  of  the  stat.  are  general,  "  mutual  debts  :"  and  in 
almost  all  the  cases  where  a  set-ofiis  allow^ed,  the  balance  is  uncertain.  In  an  ac- 
tion upon  a  quanutm  meruit,  the  very  expression  shows  that  the  damages  are  unli- 
quidated :  so  in  an  action  for  work  or  labour  done,  for  goods  sold  and  delivered, 
the  damages  are  unliquidated.  No  inconvenience  can  arise  in  the  present  case, 
because  these  damages  arise  upon  the  same  instrument,  and  make  but  one  transac- 
tion :  the  jury  therefore  can  decide  with  equal  ease  upon  both. 

Lord  Mansfield.  I  take  this  plea  to  be  merely  for  the  purpose  of  delay.  The 
act  of  parliament,  and  the  reason  of  the  thing,  relate  to  mutual  debts  only.  These 
damages  are  no  debts.     An  indebitatus  assumpsit  could  not  be  brought  for  them. 

Mr  Justice  Ash  HURST.  Debts  to  be  set-oft' must  be  such  as  an  indebitatus  as- 
sumpsit will  lie  for. 

Mr.  Justice  Aston.  Clearly  an  unliquidated  demand  or  uncertain  damage.? 
cannot  be  set-ofl".     Mr.  Justice"  Willes  concurred. 

Judgment  for  the  plaintiff. 

Wdgallv.  Waters,  M.  T.  36  Geo.  3.  J.  D.  1795.  6  T.  R.  488. 

TO  an  action  of  covenant  for  half  a  year's  rent,  27/.  10*.  due  at  Christmas  1794, 
for  a  house  demised  by  the  plaintiff  to  the  defendant  for  21  years  from  Christ- 
oiias  1788,  the  latter  pleaded  that  by  the  said  indenture  (on  which  the  action  was 
brouo-ht)  he  the  defendant  covenanted  to  repair  and  to  surrender  to  the  plaintiff  at 
the  end  of  the  term  the  same  premises  well  and  sufficiently  repaired,  "casualties 
by  fire  and  tempest  excepted  ;"  that  before  the  24th  of  June  1794,  a  violent  tempest 
arose  and  threw  down  with  great  force  and  violence  a  stack  of  chimneys  belonging 
to  the  house  on  the  roof  of  the  house,  &c.  and  damaged  the  house  so  much  that  it 
would  soon  have  become  uninhabitable,  if  he  (the  defendant)  had  not  immediately 
repaired  it ;  that  he  was  obliged  to  lay  out  in  the  repairs  30/.  which  the  plaintiff' 
became  liable  to  repay  to  him  ;  that  that  sum  is  still  due  to  the  defendant,  and  ex- 
ceeds the  damages  sustained  by  the  plaintiff"  by  reason  of  the  breach  of  covenant 
assigned  ;  and  that  he  is  ready  to  set-oflTthat  30/.  &c.  according  to  the  statute. 

To  this  plea  there  was  a  special  demurrer,  assigning  these  causes  ;  that  it  is  not 
alleged  in  the  plea  that  the  plaintiff' had  any  notice  of  the  tempest  or  of  the  damage- 
thereby  done  to  the  house,  nor  that  he  was  requested  to  repair  the  same  before  the 
defendant  made  the  repairs  stated  in  the  plea,  &c. 

Holroyd  was  to  have  argued  in  support  of  the  demuiTcr,  and 
Toller  against  it.     But 

The  court  said  that  the  plea  coidd  not  possibly  be  supported,  and  that  It  did  not 
admit  of  any  argument. 

Lord  Ke'nyox,  Ch.  J.  One  objection  to  the  plea  is,  that  it  does  not  set-off"  any 
certain  debt,  but  uncertain  damages.  I  do  not  indeed  see  by  what  covenant  the 
landlord  is  bound  to  repair  damages  occasioned  by  fu-e  or  tempest ;  the  exception 
was  introduced  in  the  lessee's  covenant  for  his  benefit,  and  to  exempt  him  from 
particular  repairs.  But  if  the  defendant  can  maintain  any  action  against  the  plain- 
tiff", (his  landlord)  the  sum  to  be  recovered  is  uncertain  ;  it  must  be  assessed  by  a 
ivu'v  ;  and  there  is  no  pretence  to  say  that  those  uncertain  damages  may  be  set-off" 
to  the  present  action.  If  the  plaintiff"has  fairly  laid  out  money  in  I'epairing  what  he 
was  not  bound  to  repair,  perhaps  a  court  of  equity  will  give  him  relief. 

Judgment  for  the  plaintiff'.(a) 

(a)  Vid.  Paradine  v.  Jane,  All.  26.  Monk  v.  Cooper,  2  Str.  763.  Belfcur  v.  Westotij 
ante  1  •col.  310.  Doe  v.  Sandham,  ib.  705.  and  Brovin  v.  Shtilter,  Amb.  619. 


APPENDIX.  19 

French^  jissignee,  y.  Fcnn,  T.    T.  1783.  Cooke^  634. 

IN  an  action  brought  ag-ainst  the  defendant  for  money  had  ;ind  received  to  tlie  use 
of  the  plaintiff's  as  assijjnees  of  Cox. 

The  defendant  pleaded  tlie  g-eneral  issue,  a  verdict  was  found  for  the  plaintiffs, 
subject  to  the  opinion  of  the  coui-t  on  tlie  following  case  : 

That  on  the  24tli  of  Januiiry  1778,  Cox,  Holford  and  Fenn,  agreed  to  purchase  a 
row  of  pearls  for  an  adventure  in  trade,  and  liiat  Fenn  should  advance  the  money- 
The  agreement  was  as  follows  :  "  London,  24th  January  1778, y.  Cox,  y.  Hulfoi'j, 
"  and  y.  Fenn,  piu'chased  a  row  of  pearls  of  ya77ies  Le  yeune,  for  2050/.  including 
*'  the  commission.  The  said  sum  was  advanced  by  y.  Fenn,  upon  an  agreement 
"  that  profit  and  loss  thereon  should  be  equally  divided  between  them  in  tliirds  ; 
"  in  consequence  of  which  we  the  undersigned  do  hereby  agree  to  pay  two-thirds 
"  of  the  interest  tliereon,  from  the  said  24th  of  Januai-y  1778,  till  tlie  said  row  of 
"pearls  are  sold.     Signed  by  Holford,  and  Cor." 

In  November  1778,  Cox  became  a  bankrui^t,  after  which  the  defendant  sent  the 
row  of  pearls  to  C/j/Via,  wliere  it  was  sold  for  6000/.  and  the  nett  produce  thereon 
being  5000L  was  remitted  to  the  defendant. 

Cox,  at  the  time  of  his  bankruptcy,  was  indebted  to  the  defendant  in  a  much 
larger  sum  than  a  third  of  the  prohts  of  this  adventure. 

The  defendant  in  this  action  had  pleaded  non  assumpsit,  and  given  notice  of  set- 
eff :  the  question  for  the  consideration  of  the  court  therefoi-e  was,  whether  he  was 
entitled  to  set-off  ihe  sums  owing  to  him  from  tiie  bankru])t  in  bar  of  tiie  action 
brought  by  the  bankrupt's  assignees  for  a  third  of  the  profits  iu-ising  from  the  sale 
of  tiie  pearls. 

It  was  argued  by  Davenport  and  Lee,  at  different  times,  for  the  plaintiff,  and  by 
Bahkvin  and  Wilson,  for  the  defendant. 

For  the  plaintiHit  was  insisted,  tliat  if  these  partners  were  part  owners  in  a  ship, 
and  one  of  them  became  bankrupt,  tlie  third  sliare  of  the  ship  vests  in  the  assignees, 
and  afterwards  when  the  ship  is  sold  the  assignees  must  be  paid  a  third,  and  if  he 
was  privately  indebted  to  tlie  other  partners  it  could  not  be  set-off. 

Suppose  these  pearls  had  consisted  of  three  of  equal  value,  had  not  the  assignees 
a  right  to  one  if  they  had  been  divided?  Then  sending  them  abroad  afterwards  and 
changing  them  into  money  can  make  no  difference. 

There  is  not  any  usage  which  peculiarly  decides  this  point 

In  Prescofs  case,  1  Atk.  230  the  petitioner  was  a  creditor  of  the  bankrupt  for 
100/.  and  10/.  and  a  debtor  to  him  on  bond  for  340/.  payable  on  the  4th  of  March 
1756,  with  lawful  interest,  and  applied  to  set-oHhis  demand  of  100/.  against  the 
principal  and  i.iterest  due  on  the  bond,  and  not  be  obliged  to  prove  bis  debt  under 
the  commission,  and  take  a  dividend  upon  it  only.  The  Lord  Chancelli)r  said, 
though  this  is  not  in  strictness  a  mutual  debt,  yet  it  is  a  mutual  credit,  for  the 
bankrupt  gives  credit  to  tlie  party  in  consideration  of  tlie  bond  tliough  payable  at  ii 
future  day,  and  he  gives  the  bankrupt  credit  for  the  debt  upon  simple  contract, 
and  therefore  it  is  a  case  within  the  e(]uity  of  the  5  Geo.  2. 

In  the  case  ex  parte  Deezc,  1  Ath.  228.it  was  determined  that  the  purchaser  may 
retain  goods  till  he  is  paid  tlie  price  of  parking  ;  and  if  lie  has  anotlier  debt  due  to 
him  from  tlie  same  person,  the  goods  sliall  not  be  taken  from  iiiin  till  he  has  paid 
the  whole,  notwithstanding  the  debtor  is  become  a  bankrupt. 

None  of  the  cases  that  have  been  determined  ruled  this.  Cox  at  tlic  time  of  his 
bankruptcy  was  indebted  to  the  defendant  in  a  nuich  larger  sum  ;  there  was  at  that 
time  no  mutual  credit  at  all;  at  the  time  he  broke  there  was  no  mutual  debt  ;  n(.  mu- 
tual credit  ;  Fenn  was  the  only  creditor. 

It  is  stated  that  the  nelt  produce  was  remitted  to  the  defendant  without  any  con. 
sent  of  Cox  as  far  as  it  appears,  and  even  without  his  knowledge 

Tiiere  was  no  remittance  till  some  years  after  the  bankniptey,  so  that  the  case 
excludes  the  possibility  of  Cox,  or  any  person  standing  in  his  place,  having  at  that 
time  any  demand  upon  fV;!/). 

The  5  G.  2.  c.  30.  s.  28.  enacts,  that  where  there  hath  be.-u  mutual  rndil  given 
by  the  bankrupt  or  any  other  person,  or  mutual  d.  bis  between  the  bnnknipt  and  any 
otiicr  person  at  anytime  before  surli  person  beraine  banknip),  <ine  debt  may  l-e  set 
against  anotlier,  and  v  h:(».  ".h;.!!  appear  to  be  due  on  eithrr  -i.!-  on  balance  of  hucli 


20  APPENDIX. 

account,  and  on  setting'  such  debts   one  against  another,   and  no  more,  shall  be 
chuimed  or  paid  on  cither  side  resi)cctively. 

The  accounts  by  tiiis  statute  must  be  befoi-ethe  banki'uptcy.  This  is  the  essen- 
tial difference  between  this  case  and  t^iose  decided. 

Fenn  owed  Cvx  nothing  at  the  time  of  the  bankruptcy.  I'lie  very  pearl  was  in 
England  at  that  time. 

ihe  moment  he  became  a  bankrnptthcrc  was  an  entire  stop  put  to  all  his  affairs. 

Could  Fenn  have  gone  before  the  commissioners  and  said,  1  don't  choose  to  prove 
this,  because  there  is  an  adventure  between  us  :  when  tlve  proceeds  are  remitted 
home  I  will  retain  my  debts. 

There  was  no  credit,  nor  no  idea  of  credit  till  long  after  the  banlu'uptcy. 

The  statute  seems  to  m;Ji.e  tliat  event  a  stop  and  a  rest  in  the  afi'airs,  beyond 
which  nothing  should  go  on. 

There  is  no  case  decided  circumstanced  like  this 

Had  Cox  any  demand  uponFt77«,  at  tlie  time  of  buying  the  row  of  pearls  ? 

Fenn  could  not  have  brought  an  action  against  any  of  them  till  the  goods  wcra 
sold. 

To  allow  this  set-off  would  be  contrary  to  the  words  of  the  act. 

The  com'ton  the  second  argument  stopped  Mr.  Wilson  for  the  defendant,  and 
Lord  3/a?!*/?e/i/ said,  The  act  of  parliament  is  accurately  drav/n  to  avoid  the  in- 
justice tliat  would  be  done  if  the  words  %vere  only  mutual  debts,  and  it  therefore 
provides  for  mutual  credit. 

In  this  case  credit  is  given  to  the  defendant  for  a  row  of  pearls,  v/liich  is  to  be- 
long in  thirds  to  tlirce  persons.  As  Fenn  advanced  the  whole  money,  the  other 
two  were  to  pay  liim  interest  for  tlieir  shares  till  the  pearls  were  sold ;  there  is  no 
doubt  but  there  was  a  mutual  credit.  Cox  had  trusted  him  with  the  pearls,  and 
he  had  trusted  Cox  with  other  goods,  which  in  all  probability  he  would  not  have 
otherwise  done. — This  is  the  real  justice  of  the  case  if  there  had  been  no  bank- 
ruptcy, and  the  bankruptcy  ought  not  to  alter  the  i-eal  justice  oftlie  case. 

Mr.  Justice  Bulleu. — Whei'e  there  is  a  trust  between  two  men  on  each  side, 
that  makes  a  mutual  credit. 

The  whole  of  the  Solicitor's  {Lee)  argument  goes  to  shew  there  are  no  word.s 
in  the  act  but  mutual  debts,  which  is  directly  contrary  to  the  fact. 

On  principle  and  justice  there  is  no  diilei'ence  between  this  case  and  those  of 
Prescot  and  Decze. 

The  set-off  being  allowed,  the  postea  was  ordered  to  the  dv^'  ndant. 

Slipper  and  Others^  Assig)iees  of  Lane  v.  Sticiitone.  H.  T.  34  Geo,  III.  A. 
Z7...1794.  5   T.  R.  49.1. 

TO  this  action  for  work  and  l.ibour  done  by  the  bankrupt,  goods  sold  and  de- 
livered, and  money  lent  by  him,  the  defendant  pleaded  the  general  i.ssue, 
and  gave  a  notice  of  set-off  for  work  and  labour  oi"thc  defendant  and  oiie  P.  Abbot, 
since  deceased,  whom  the  defendant  survived,  by  tliem  performed  for  the  bank- 
rupt. Sec.  At  the  trial  before  Lord  A'tVivow,  the  sum  set-off  exceeded  tlie  plain- 
tiff's demand,  upon  which  the  plaintiff"  was  nonsuited,  though  it  was  contended 
on  his  belialf  that  the  set-off  was  in  auter  droit,  and  ought  not  to  be  allowed  in  tjas 
action. 

Laix  on  a  former  day  in  this  term  moved  to  set  aside  the  nonsuit,  contending 
that  the  set-off  slxould  not  have  been  allowed,  for  that  there  was  no  nmtuality  of 
debt;  that  the  fund  out  of  which  the  satisfiction  was  to  be  made  by  the  plaintiff  to 
the  defendant  as  surviving  partner  was  not  the  samq  as  that  from  whicli  satisfaction 
was  to  be  made  to  the  plaintiff  by  tlie  defendant  ;  tliat  the  only  mutuality  here 
consisted  in  the  personsof  the  plaintiff  and  defendant;  thai  before  the  death  of  yiZ/Aoi 
it  coidd  not  be  pretended  that  the  debt  due  from  the  plaintiff  tf)  him  and  the  defen- 
dant could  be  set-off  in  an  action  against  the  defendant ;  and  that  on  principle,  the 
death  of  Abbot  could  not  vary  this  question.  That  this  set-off  could  not  be  per- 
mitted anymore  than  a  debt  due  from  the  plaintifl'to  any  person  to  whom  the  de- 
fendant happened  to  be  executor ;  and  that  if  this  set-oifwere  allowed,  it  would 
create  confusion  in  the  arrang-ementof  the  costs  of  the  different  suits. 

The  court  then  granted  a  rule  nisi  :  but  on  this  day  they  recommended  it  to  the 
plaintifTnot  to  druw  up  the  rule,  as  it  would  only  enhance  the  expense  of  the  suit. 


APPENDIX.  21 

the  question  being  perfectly  clear  with  the  clofondant.  They  saidtliat  the  defen- 
dant mig'lit  have  declaimed  ug-ainst  the  plaintitV  tor  this  demand  and  also  for  any  sum 
due  to  him  separately(a)  if  any  such  had  been  due  ;  and  that  tiicrofore  there  was 
no  reason  why  the  set-otf  should  not  be  allowed.  Rule  refused. 

French  v.  Jjidrade,  H.  T.  36  Geo.  III.  A.  D.  1796.  6  T^R.  582. 

THIS  was  an  action  upon  promises  ;  to  which  the  defendant  pleaded  that  the 
plaintiff  and  one  y.  Xtvcton  who  died  before  the  commencement  of  the  action 
were  indebted  to  the  defendant  in  divers  sums  of  money,  8ic.  for  work  and  labour^ 
money  paid  &.c.  that  those  sums  remained  unpaid  at  the  death  of  y.  Neuton,  and  at. 
the  time  of  conmiencing'  this  action  were  and  still  are  due  from  the  plaintitl'to  tiio 
defendant ;  and  that  they  exceed  the  sum  due  from  the  defendant  lo  the  plaintiff, 
against  which  sum  the  defendant  is  willing  to  set-ofl',  &c. 

To  this  plea  there  was  a  general  demurrer.  ' 

Marryat,  in  support  of  the  plea,  mentioned  the  case  of  Slipper  v.  StiJstotie(l>)  a.'5 
decisive  of  the  present ;   which 

Wood,  contra,  admitted. 

Per  Curiam.  It  is  perfectly  clear  that  the  debt  due  from  tiie  plaintiff  as  sur- 
viving partner  may  be  set-ofl'  against  tlie  denwuid  he  has  in  Ids  own  right  on  the 
defendant.  Judgment  for  the  defendant. 

Fletcher  v.  Dijche,  T.  T.  27  Geo.  III.  A.  D.  1787.  2  T.  R.  .>3. 

ASSUMPSIT  for  work  and  labour,  for  goods  sold  and  delivered,  money  paid, 
&c.  Pleas,  non  assumpsit ,-  2dly.  Set-ofl"  for  money  paid,  and  had  and  reeeiv-^ 
ed  ;  3dly.  A  plea  of  set-off  as  follows  :  That  heretofore,  lo  wit,  on  the  27th  day  of 
Jime  1785,  tu  wit,  at,  &c.  the  plaintiff  by  a  certain  writing  obligatory  sealed,  &.c. 
became  held  and  firmly  bound  to  the  defendant  in  the  sum  of  236/.  to  be  paid  la 
the  defendant,  when  he  the  plaintiff  should  be  thereto  afterwards  requested,  with 
and  under  a  certain  condition  thereto  subscribed  and  underwritten,  reciting  that 
the  defendant  had  contracted  and  agreed  with  the  committee  chosen  for  the  order- 
ing, appointirg,.'inddirectingof  tlierepairsof  the  parish  churchof  St.  Mary-lc-Bosv, 
London,  for  repairing  of  the  said  parish  churcli,  according  lo  a  certain  particular  or 
plan  thereof  given  ;  and  reciting,  that  one  'Jolui  Bowiey,  therein  called  the  abo\t- 
bounden  yo/in  Do^ccky,  but  whc)  never  executed  tlie  said  writing  obligatory,  aiul 
the  plaintiff',  iiad  contracted  and  agreed  with  the  defendant,  that  they  would  do,  per- 
form, and  execute,  all  the  smith's  and  ironmonger's  work,  to  be  done  and  perform- 
ed in  and  about  the  repairs  of  the  said  parish  church,  and  which  were  mentionei! 
and  expressed  in  the  said  particular  plan,  or  estimate,  and  in  the  manner  llieicin 
directed  to  be  done,  and  find  and  providv:  all  tiie  materials  for  the  doing  thereof 
within  tiic  time  or  space  of  six  weeks  from  the  day  of  the  date  of  the  said  willnig 
obligatoiy,  at  and  for  the  price  or  sum  of  118/.  I8.1.  whith  was  agreed  to  be  ])ai>l 
in  three  months  after  the  said  p.'j-ish  chureii  should  be  completely  repaired  ;  auil 
had  agreed  that  if  they  should  iiot  have  done  and  performed  tiie  said  smith's  and 
ironmonger's  work  within  tlie  time  therein  before  mentior.ed  to  have  been  agreed 
upon  and  limited  for  the  doingtiiereof,  they  would  Ibrfeit  and  pay  to  the  defentlant 
the  sum  of  10/.  for  every  week  after  tlie  expiration  of  tlie  time  agreed  upon  and 
limited  f  jr  the  doing  thereof,  until  the  said  smith's  and  iionmonger's  \\ork  sliouh! 
be  completeK  finished  ;  the  condition  iheiofore  ofthe  said  writing  obligatory  was, 
that  they  the'said  yohii  D'yjjU'y  mu\  the  plaintlH  should  within  the  time  or  space  of 
six  weeks  [lerform  in  a  good  and  workmanlike  manner,  according  to  the  said  jil.ui, 
all  the  smith's  and  ironinonger's  work,  Sic.  an<l  should  find  and  provide  ihc  ma- 
terials, &.c.  and  should  keep  indemnifii-d  the  defendant,  his  executors,  Sec.  and 
that  if  they  the  said  ^0/1/1  Do\d<y  and  the  jilaintKf. should  make  default,  or  sluiuid 
neglect  to"  do  the  said  smith's  and  ironmonger's  work  within  the  time  limited, 
they  should  well  .-ind  truly  pay  lo  the  defendant,  hi-;  c.cee.utorK,  &c.  tlu-  sum  of  lo/ 
for  every  wet-k  from  the  time  the  saitl  Miiith's  and  ironinongii's  work  uuglit  to  b»j 
done,  being  six  wei.-ks  from  the  day  of  the  date  of  the  said  writing  obligatorv.  un 
therein  above  mentioned,  until  the 'same  .should  be  completely  finished.     .■\nd  tho 

(a)  Vide  HMrori-  v   Uayvmnd,  nntr,  1  -.ol  •!"■;.     f/')  Antr,  .1  wl  \')?> 


22  APPENDIX. 

defendant  in  factsaith,  that  the  said  yohn  Dowley  and  the  plaintlflFdid  not,  nor  did 
either  of  them,  within  the  said  time  or  space  of  six  weeks  from  the  day  of  the  date 
of  the  said  writing  oblig^atory,  do,  perform,  or  execute,  or  cause,  &c.  all  the  smith's 
and  ironmonger's  woi-k,  8tc.  but  neglected  and  omitted  so  to  do,  and  therein  failed 
and  made  default,  and  on  the  contrary  thereof  suli'ered  and  permitted  the  said 
smith's  and  ironmonger's  work  to  be  and  remain  unfinished  for  the  space  of  four 
weeks  next  after  the  expiration  of  the  time  agreed  upon  and  limited  for  the  doing 
thereof  as  aforesaid  ;  whereby,  and  by  force  of  the  said  writing  obligatory,  and 
condition,  the  plaintiff  became  liable  to  pay  to  the  defendant  the  sum  of  40/.  being 
at  and  after  the  rate  of  10/.  for  each  aiid  every  week  of  the  said  four  weeks,  after 
the  expiration  of  the  time  so  agreed  upon  and  limited  for  the  doing  of  the  said 
smith's  and  ironmonger's  work,  during  which  the  same  so  remained  unfinished  as 
aforesaid  ;  and  the  said  sum  of  40/.  and  every  part  thereof  at  the  time  of  the  com- 
mencement of  this  suit  was  and  still  is  really  and  justly  due  and  owing  from  the 
plaintiff  to  the  defendant  upon  and  by  virtue  of  the  said  writing  obligatory,  and  the 
condition  thereof;  and  which  said  sum  of  40/.  so  due  and  owing  from  the  plaintiff 
to  the  defendant  exceeds  the  damages  sustained  by  the  plaintiff,  by  reason  of  the 
not  perfoi-mlng  of  the  said  several  promises  and  undertakings  in  the  said  declara- 
tion mentioned,  and  out  of  which  said  sum  of  40/.  he  the  defendant  Is  ready  and 
vriUlng  and  hereby  offers  to  set-off  and  allow  the  amount  of  the  damages  sustained 
by  the  plaintiff,  according  to  the  form  of  the  statute.  Sic.  and  this  the  defendant  is 
ready  to  verify,  wherefore,  &c. 

To  this  third  plea  there  was  a  general  demurrer,  and  joinder  in  demuiTer. 

Law,  In  support  of  the  demurrer,  contended  that  the  third  ])lea  setting  off  the 
four  penalties,  at  the  rate  of  10/.  for  four  weeks  after  the  expiration  of  the  time 
limited  for  doing  the  smith's  and  Ironmongers's  work,  could  not  be  supported.  First, 
because  it  attempts  to  set-off  a  penalty  instead  of  the  money  justly  due.  If  this 
set-off  can  be  allowed  at  all,  it  must  be  under  the  8  Geo.  2.  c.  24.  s.  5.  But  that 
statvite  does  not  extend  to  this  case  ;  for  that  only  allows  the  debt  really  and  justly 
due  to  be  set-off.  So  that  a  penalty  cannot  be  set-off  at  all ;  now  this  is  strictly  a 
penalty  ;  the  words  creating  the  penalty  are  "  that  the  plaintiff  shall  forfeit  and 
pay  10/.  weekly,  &c.  And  it  cannot  be  considered  as  a  mere  compensation  to  the 
defendant  for  non-performance  of  the  work  within  the  time  limited  ;  for  it  does  not 
appear  that  the  defendant  was  himself  under  any  limitation  in  point  of  time  as  to 
the  performance  of  his  contract  with  the  commissioners.  It  Is  likewise  excessive, 
because  it  bears  no  proportion  to  the  whole  sum  to  be  paid  for  the  work  done.  And 
there  are  no  other  limits  to  the  penalty  than  the  penalty  of  the  bond  itself  If  it  be 
contended  by  the  defendant's  counsel,  that  this  Is  In  the  nature  of  a  liquidated  sa- 
tisfaction. It  is  to  be  observed  that  this  Is  not  like  any  of  those  cases  which  have 
been  determined  on  that  ground.  In  the  case  of  Rolfo  v.  Peterson(a)  where  the 
lessee  covenanted  to  pay  an  Increased  rent  for  ploughing  up  meadow  ground,  it  was 
considered  not  as  a  penalty,  but  as  a  liquidated  satisfaction  :  for  it  was  only  an 
agreement  to  p.ay  a  larger  sum  for  using  the  land  in  a  particular  way.  But  the  pre- 
sent case  is  that  "of  a  strict  penalty.  In  consequence  of  not  performing  an  agreement, 
for  which  there  does  not  appear  to  be  any  equivalent  to  the  party.  There  are  se- 
veral cases  where  penalties  have  been  considered  in  the  nature  of  liquidated  dama- 
ges, but  those  are  cases  where  the  penalties  have  barely  exceeded  the  sums  really 
due,  and  they  have  been  allowed  to  save  the  parties  expense.  Such  was  the  case 
of  Tall  V.  Ryland,  1  Ch.  Cas  183.  In  Ntdriffe  v.  Hogan,{b)  it  was  _  determined  that 
a  penalty  cannot  be  set-off.  If  an  action  had  been  brought  on  this  bond,  it  would 
Lave  been  competent  to  the  jury  to  have  given  less  damages  than  the  amount  of 
these  penalties.  2  Rol.  Abr.  703.pl.  9.(c)  Before  the  statute  8  and  9  W.  3.  the 
jury  might  have  given  less  damages  than  the  penalty.  1  iew.  111.  And  since 
the  statute  they  ought  to  give  the  damages  really  sustained  by  the  non-performance 
of  the  work.  Here  the  party  might  be  put  In  as  good  a  plight  as  if  the  condi- 
tion of  the  b^nd  had  been  performed  :  tills  rule  was  laid  down  by  'Lord  Somers,{d) 
that  in  such  case  a  court  of  equity  would  i-elleve  ;  therefore  the  defendant 
should  have  averred  that  the  damages' really  incurred  by  the  non-performance  of 
the  agreement  amoiuited  to  the  sum  wliich  he  intended  to  set-off.     This  is  not 

(a)  6  Bro.  Pari.  Cas.  470.  (/>)  2  Burr.  1024. 

(c)   Vide  4  Burr.  2229.  2231.  {d)  Free,  in  Chan.  487. 


APPENDIX.  23 

like  Uxe  case  of  demurrag'e,  which  is  a  stipulated  rate  of  hire,  and  not  a  forfeiture; 
for  there  tlie  owner  of  the  ship  loses  the  use  of  her  during  the  whole  time  she  is 
detained,  and  the  other  party  has  the  use  of  her  the  whole  time. 

But  secondly-  This  cannot  be  set-oft',  because  there  is  no  strict  mutuality.  It  sets 
off  money,  which,  by  the  condition  of  the  bond,  was  to  become  due  from  the  plain- 
tiff  and  another,  and  not  from  the  plaintift"  iJone,  by  virtue  of  an  antecedent  agi-ee- 
ment  between  the  three.  Andtliough  this  bond  was  only  executed  by  the  plaintiff 
yet  the  defendant  is  estopped  from  saying  that  this  debt  is  not  due  from  tlic  plain- 
tiff and  another  ;  he  cannot  dispute  their  joint  liability.  Besides,  the  breuch  as- 
signed  is  not  wai-ranted  by  the  condition.  The  bond  is  conditioned  for  the  per- 
formance of  certain  work  in  a  limited  time  by  two,  or  payment  by  two  oi'lOi.per 
week.  The  bi-each  should  have  been  assigned,  that  the  two  had  neither  done  the 
work,  nor  paid  the  money,  whereby  the  penalty  became  forfeited.  AVhereas  it  is 
assigned,  that  the  two  had  not  done  the  work,  8ic.  whereby  the  one  became  liable 
to  pay  tlie  10/.  per  week  :  but  no  such  liability  was  created  by  tlie  bond  itself. 

The  other  side  was  stopped  by  the  court. 

AsHHLRST,  J.  The  sums  set-off  are  in  the  nature  of  liquidated  damages,  and 
are  such  a  kind  of  penalty,  if  tlicy  may  be  called  by  that  name,  as  a  court  of 
eqiuty  would  not  relieve  against.  The  object  of  thepai-ties  in  naming  this  ^\e^■kly 
sum  was  to  prevent  any  altercation  with  respect  to  the  quantum  of  damages  which 
the  defendant  might  sustain  by  reason  of  the  non-performance  of  the  contract.  It 
would  have  been  difhcuit  for  the  jury  to  have  ascertained  what  damages  the  defen- 
dant had  really  suffered  by  tlie  breach  of  the  agreement  ;  and  tlicreforc  it  was  pro- 
per for  the  contracting  parties  to  ascertain  it  by  their  agreement.  So  that  this  is  a 
case  of  stipulated  damages,  and  it  is  not  to  be  considered  as  a  penalty.  If  so,  and 
the  parties  have  entered  into  a  joint  and  several  bond,  it  becomes  the  separate 
debt  of  botli,  and  therefore  may  be  set-oft' against  either.  Then  it  has  been  ob- 
jected, tliat  there  is  no  mtituality  in  the  debts  ;  because,  first,  it  is  a  joint  debt ; 
and  secondly  that  the  plaintift' should  have  a  compensation  from  the  otlier  party. 
As  to  the  first,  it  is  sufficient  to  say,  that  tills  is  a  separate  as  well  as  !X  joint  debt, 
and  therefore  maybe  set-off".  And  as  to  the  other  ground  of  objection,  it  is  not 
necessary  to  determine  that  question  in  tiiis  case  ;  but  if  it  were,  I  think  he  might 
have  compensation  in  another  form,  by  bringing  an  action  for  money  paid,  laid  out, 
and  expended  to  his  use.     But  that  is  not  material  as  between  these  parties. 

BuLLEti,  J.  The  principal  question  to  be  considered  is,  whether  this  is  in  the 
nature  of  liquidated  damages  of  a  penalty.  When  there  is  a  penalty  in  tlie  bond, 
it  is  strange  tliat  tlie  sum  mentioned  in  the  condition  could  be  called  a  penalty.  I 
do  not  know  how  there  can  be  an  equitable  and  a  legal  penalt)-.  But  this  is  as 
strongly  a  cxse  of  liquidated  damages  as  can  possibly  exist,  and  is  like  the  case  of 
demurrage.  In  cither  case  it  is  impossible  to  ascertain  precisely  what  damage* 
the  party  has  really  sustained  ;  andtheref)rc  the  contracting  parties  agree  to  pay 
a  stipulated  sum.  Then  it  was  contended  that  tlie  defendant  might  have  recovered 
less  damages  tlian  the  amount  of  this  stipulated  sum  before  a  jury  ;  but  tliat  is  not 
so.  In  tlic  case  of  Lowe  v.  Feers,(a)  where  a  stipulated  sum  was  claimed  for 
breach  of  a  marriage  contract,  hovd  Mans/ie/d  sii'u\,  "  wliere  tlic  precise  sum  i.s 
"  fixed  and  agreed  upon  between  the  parties,  that  very  sum  is  the  ascertained  da- 
"  mage,  and  the  jury  arc  ronfined  to  it."  As  to  the  case  in  1  Lev.  that  was  de- 
termined on  the  ground  of  its  being  a  catciiing  bargain.  Tlie  plaintift  's  counsel 
then  objected  to  this  set-off  because  there  was  no  mutuality  ;  buttliat  depemls  on 
the  question,  whetlierthe  debt  is  due  from  the  [ilainliftand  anotlier  person,  or  from 
the  plaintift' alone.  If  the  former,  the  debt  cannot  be  set-oft';  I)ut  it  appears  tli»t 
the  bond  w.hs  executed  by  tlic  plaintiff  alone.  No  debt  can  arise  upon  the  b(md 
from  tlie  otlier  party  who  did  not  execute.  The  plaintiff"  tlicreforc  alone  can  be 
sued  upon  the  bond  ;  .so  that  there  is  a  mutuality. 

Grose,  J.   was  of  the  same  opinion. 

But  the  court  afterwards  gave  the  plaintiff  leave  to  amend  on  paj-ment  of  cost's. 

(a)  4  flurr.  322.x 


24  Ari'ENDIX. 

Vullcr  and  Others,  Astsignecfi,  is'c.  nf  Forben  and  Gr'egorij,  BankrujUs^  \ ,  Roe 
and  Others^  M.  7".  *34  Geo.  III.  Peake  197. 

ASSUMPSIT  on  .i  pvomlssorv  note  for  9800/.  dated  March  8,  1793,  payable  to 
Charles  Cald-ivelt,  Esij.  and  Company,  or  order,  and  by  them  indorsed  to  the 
bankrupts  under  the  firm  of  "  Messrs.  B.  Burton,  Forbes  and  Gregory." 
The  defendants  pleaded  the  g-eneral  issue,  and  g-ave  notice  of  sct-of}'. 
Bart/iolonievj  Burton,  and  the  bankrupt  i-6;-A«,  carried  on  the  business  of  g'cncral 
merchants  in  London,  from  the  jear  1762  to  1769,  and  on  the  Slstof  Januaiv  1769 
tlie  bankrtipt  Gregory  was  admitted  a  partner  in  the  liouse.  Burton  died  "on  the 
LTth  of  April  1770,  but  the  business  was  still  carried  on  under  the  old  firm  of 
"  Burton,  Forbes  :uid  Gregory." 

On  the  21st  of  May  1774,  Forbes  and  Gregory  became  partners  with  Charles  Cald- 
-wcU  and  Thomas  Smith,  in  a  banking'-housc  at  Liverpool,  under  the  firm  of  Charles 
Caldwell  &  Co.  aud  that  partnership  continued  to  the  time  of  their  respective  bank- 
niptcies,  which  haj)])ened  in  the  montli  of  March  1793,  viz.  that  of  Forbes  and 
Gr^ory  on  the  16th,  and  that  of  Caldwell  &  Co.  on  the  18th  of  that  month. 

The  two  houses  of  Forbes  and  Gregory  and  Caldxvell  &.  Co.  were  distinct  and  sepa- 
rate houses  ;  Caldnaell  and  Smith  having-  no  concei-n  in  the  business  carried  on  by 
Forbes  ajid  Gregory  in  London,  thoug-h  the  latter  were  partners  in,  and  equally 
cf)ncerned  with  Caldme/l  and  Smith  in  the  banking-  business  carried  on  at  Liver- 
pool, vmder  tlie  firm  of  "  Charles  CaLkcell  &  Co." 

Cahhvell  and  Smith  were  also  in  partnership  with  the  defendants  under  the  firm 
oC  i?f/f  &  Co.  wliich  company  kept  a  banking-  accoimt  with  the  house  of  Caldwell  & 
Co.  at  Liverpool ;  and  tliat  house  being  in  advance  for  the  defendants,  thej',  on  the 
8th  of  March  1793,  made  and  sig-ned  the  note  on  which  the  action  was  brought ; 
and  the  house  of  Caldwell  &  Co.  at  Livei-po.ol,  being  indebted  to  Forbes  and  Gregory 
'to  a  large  amount,  indorsed  tlie  note  to  them. 

This  note  was  given  for  the  balance  then  supposed  to  be  due  from  tlie  defendants 
to  Caldwell  &.  Co.  but  it  was  afterwards  discovered  that  a  sum  of  3859/.  1;.  with 
which  the  defendants  were  debited  for  simdr)-  bills  supposed  to  ha^'e  been  drawn 
by  Major  (Ca/r/we// &.  Ca.'o- agent  at  Trui'o)  was  improperly  charged;  such  bills 
never  having  been  in  f;ict  di-awn. 

Bower,  for  the  defendants,  contended  that  Forbes  and  Gregory  being  partners  in 
the  hou'te  of  Caldwell  &  Co.  must  take  this  note,  charged  witli  ever}-  incumbrance 
whicli  it  would  be  liable  to  in  the  hands  of  Caldwell  &  Co.  and  therefore  that  the 
d'^fendants  had  a  right  to  deduct  the  abovementioned  sum  of  3859/.  Is.  and  to  set- 
off not  only  the  sum  of  680/.  8s.  lOd.  due  to  t]\em  from  Forbes  and  Gregory  as  the 
a-ccptors  of  several  bills  di-awn  by  Caldwell  &  Co.  on  them  ;  but  also  the  sum  of  260/. 
I8y.  3/.  due  to  the  defendants  from  Caldwell  &.  Co.  on  several  bills  drawn  by  Cald- 
well &  Co.  on  Forbes  and  Gregory,  which  were  itot  accepted  by  them.  Some  of  these 
bills  had  been  drawn  b}-  Caldwell  &.  Co.  for  checks  drawn  upon  them  by  the  defen- 
dants as  their  bankers  ;  and  the  bills  not  being  ])aid  when  they  became  due,  in  con- 
sequence of  the  failure  of  Caldwell  &  Co-  and  Forbes  and  Gregory,  the  defendants 
■were  obliged  to  take  them  up,  and  had  paid  to  the  severaliiolders  of  them  the  full 
A'alue  thereof.  The  others  were  either  payable  to  the  defendants,  or  indorsed  to 
them  by  the  respective  payees. 

Ersk  I NE,  for  the  plaintiffs,  contended  that  Forbes  ^vidi  Gregory  being  a  distinct 
a-id  separate  house,  and  creditors  of  Caldwell  &.  Co.  to  an  amount  much  beyond 
that  for  which  this  note  was  given,  were  not  liable  to  pay  the  before  mentioned  sum 
of  3859/.  \s.  or  the  bills  which  they  had  ;«3f  accepted.  For  payment  of  those  sums 
the  defendants  must  look  to  the  estate  of  Caldwell  &  Co.  who  were  their  debtors. 
Lord  K.EXY0N.  This  note  was  given  to  Caldwell  8c  Co.  as  a  banking  house,  and 
constitutes  an  article  in  the  accounts  between  the  defendants  and  them.  They 
cannot  as  between  themselves  raise  a  distinct  account,  though  they  might  indorse  to 
a  third  person.  Tlie  affairs  of  the  company  are  in  ]jresum])tion  of  law  known  to  all 
the  partners,  and  all  are  equally  liable.  Tlie  defendants  send  this  bill  to  Caldwell 
&  Co.  to  cancel  part  of  the  debt  due  to  them  :  Can  they,  by  an  act  between  them- 
selves, divert  tliis  money  to  anotlier  purpose,  and  leave  the  whole  of  the  defen- 
d.ant's  debt  outstanding  ? 

Tne  plaintiffs,  therefore,  had  a  verdict  for  the  balance  due  to  them,  after  de- 
ducting the  several  before  mentioned  sums  of  money,  and  also  the  sura  of  1024/. 


0 

APPENDIX.  25 

■which  it  %vn3  admitted  that  Forbes  and  Gregory  had  received  of  the  defendants  pre- 
vious to  their  bankruptcy,  iu  the  follovvini^  term  a  motion  was  made  for  a  new 
trial,  but  the  court  refused  to  grant  a  rule  to  shew  cause. 

Grove  and  Another.,  Assignees  of  LiotarrU  a  Bankrufit.,  v.  Dubois.,  H.  T.  ,26 
Geo.  III.  A.  D.  1796.   I  T.  R.  112. 

THIS  was  an  action  for  money  had  and  received  by  the  defendant  to  and  for 
the  use  of  the  bankrupt,  before  lie  bceame  a  bankrupt;  and  for  money  had 
and  received  t)  and  for  the  use  of  tl\e  jjlaintifls,  as  assig;nees  ;  to  which  the  de- 
fendant pleaded  the  general  issue,  non  assumpsit;  whereupon  issue  was  jt)incd. 
The  defendant  also  gave  a  notice  of  set-oii'  for  money  had  and  received  by  the  as- 
sigTiees  for  his  use. 

The  case  came  on  to  be  tried  at  the  sittings  after  Michaelmas  Term  1785,  be- 
fore Lord  Mr.nsfield,  at  Guildhall,  when  tlie  Jury  found  a  verdict  for  lliC  )>huntifls, 
damages  375/.  16*.  and  costs  \s.  subject  to  the  opinion  of  this  eourt  on  the  follow- 
ing case. 

"  Tliat  the  bankrupt,  John  Liotard,  being  an  underwriter,  siibscribed  policies 
**  nlled  up  with  the  defendant's  name  for  lii:?  foreigi\  correspondents,  who  were 
**  unknown  to  the  b.inkruj)!. 

"That  losses  happened  on  the  policies  before  the  bankruptcy  of  Liotard ;  that 
**  the  dc-tendant  paid  the  amount  of  the  losses  to  his  foreign  correspondents  afier 
"  such  bankruptcy. 

"  That  the  defendant  had  a  commission  del  credere  from  his  corres]xmdents ; 
"  was  made  debtor  by  the  bankrupt  for  premiums  ;  and  always  retained  the  poii- 
"cles  in  his  hands. 

"Tlic  question  for  the  opinion  of  the  court  is.  Whether,  under  the  notice  of 
*'  set-ofl',  or  under  any  of  the  statutes  respecting  bankrupts,  the  defendant  be 
"entitled  to  sot-off'this  account  with  Liotard ? 

"  If  the  Court  shall  be  of  opinion  thattlie  defendant  Is  entitled  to  set-off,  then  a 
"  verdict  to  be  entered  for  tlic  defcniU.nt." 

S.  Hayivood,  for  the  plaiatin's,  relied  upon  the  28th  section  of  the  5  Geo.  2.c  50. 
which  requires  mutuai  credit  to  be  gi\  en,  in  order  to  enable  tlie  defendant  to  set-oil  s 
which  was  not  the  case  here  ;  for  the  credit  was  not  given  to  tlie  broker,  but  to  the 
principal ;  like  tlie  common  case  of  insurance  brokers,  who  were  nothing  more  tlian 
mere  agents,  and  were  alw.ays  so  considered.  Tlie  case  of  TVHson  and  ulliers,  assig- 
nees of  Fletcher  v.  Creighton  and  another(rt)  is  in  point.  That  was  an  action 
for  monev  had  and  received,  &c.  to  and  for  tlie  use  of  the  bankrupt,  and  to  and 
for  the  use  of  the  assignees,  ami  on  :m  account  .stated.  Tlie  defendant  pl.:aded  the 
general  issue,  non  assumpsit,  and  gave  notice  of  set-off;  Tliatthe  plaintHiii  were  m- 
debtcd  to  the  defendant  in  3000/  for  losses  upon  several  policies  of  assurance  under- 
■writlcn  bv  tlic  bankrupt,  and  which  losses  happened  before  the  bankrujitcy.  It  w  :i.s 
tried  before  Lord  Mansfield  at  Guildliall,  at  the  sittings  after  Easter  1  erm,  1782, 
when  the  jm-v  found  a  verdict  f(  r  the  plaintHfs,  subject  to  the  opinion  of  the  court 
on  the  following  case:  "Thattlie  defendants  had  considerable  <le;dings  with  the 
"  bankrupt,  as  agents  or  factors  to  various  eorresijoiuleiits.  That  they  paid  to  him, 
"  or  were  debited  bv  him  for  premiums  upon  insurance  on  behalf  of  those  corivs- 
«  pondents.  That  tliev  had  credit  for  the  losses  as  they  happ<-iicd,  and  lor  the  re- 
•'  tunis  of  premium.  That  thev  had  no  rommission  del  credere.  That  none  ot 
«  the  correspondents  for  whom  ihey  insured  w(  re  insolvent ;  l»uUo  all,  except  one, 
"  thev  were  in  advance,  more  or  les's,  on  account  (.f  the  policies."  In  that  case  llic 
eourtVere  all  clearly  of  opinion  that  imderthosecircumstances  the  deferuhmts  wete 
not  entitled  to  sct-<jff  any  of  the  suhse(|U<  iit  losses  to  an  :iction  brongl''  '>.v  «''t'  ="*•*'»>- 
nees  for  the  recovery  of  the  premiums  debited  to  the  defendants  by  th.-  bankrupt. 

The  only  difference  between  that  case  and  the  present  was  the  circuinxtaiicc  ol 
the  defendant's  having  a  commission  del  credere  from  his  comspon<l<  nts.  It  is  ma- 
t<;rial  then  to  see,  wliether  any,  and  what,  dillcrcncc  such  a  coiiiniiss.on  couUl 
make,  a.s  between  these  ))arties.  . 

A  commission  del  crcdrre  ml(,dit  be  considered  several  ways.  It  is  an  undertaking 
by  the  broker,  for  an  additional  premium  to  insure  iiis  jinncipal  Hfc'aiu->t  a  conttn, 

(a)  Trin.  22  Geo.  3.  //   // 
1> 


26  APPENBIX. 

gency,  which  contingency  is  the  faikire  of  the  underwriter;  and  therefore  it  is 
only  to  be  considered  as  a  collateral  security,  which  vested  no  such  interest  in  the 
policy,  as  tlie  broker  could  have  proved  under  the  commission  at  the  time  of  issuing 
it ;  much  lest  did  it  vest  any  interest  in  him  at  the  time  of  making  tlie  policy.  Ex 
parte  Adney.     Coivfi. 

The  broker  could  not  have  brought  an  action  in  his  own  name  upon  such  a  po- 
licy, without  averring  the  interest  to  be  in  the  principal, («)  by  which  it  would 
have  appeared  that  no  credit  had  been  given  to  him,  and  consequently  that  he  did 
not  come  witliin  the  meaning  of  the  5  Geo.  2.  c.  30.  s.  28.  If  therefore  he  could 
not  have  brought  an  action  in  his  own  right,  and  had  not  such  an  interest  in  the 
policy  as  would  have  enabled  him  to  have  proved  his  debt  under  the  commission  at 
the  time  of  its  issuing,  it  is  absurd  to  say  that  he  could  set  it  off  to  a  clear  demand 
whlcli  accrued  before  tlic  bankruptcy.  Chilton  v.  JViffin  and  another,  3  Wils.  13. 
Goddard  v.  Vanderhavcn,  3  Wils.  2&2.{b) 

But  even  supposing  an  interest  vested  in  the  broker,  and  he  could  have  brought 
an  action  in  his  own  right,  yet  he  could  not  set-ofi'the  present  demand;  for  in  fact 
there  was  no  debt  existing  at  the  time  of  tlie  banluniptcy.  The  payment  was  made 
to  the  principal  afterwards ;  and  at  any  rate  the  broker's  claim  could  not  arise  be- 
fore such  payment.  This  comes  du'ectly  under  the  principles  uniformly  laid  down 
in  the  cases  last  cited.  No  particular  event  had  then  happened  to  fix  the  broker;, 
no  demand  had  been  made  on  the  underwriter,  and  refusal.  It  does  not  appear 
upon  this  case  but  tliat  it  was  a  voluntary  payment;  and  if  the  defendant  paid  this 
sum  before  the  expiration  of  the  time  whlcli  was  allowed  to  him,  he  ought  not  to 
be  permitted  to  take  advantage  of  his  act  in  prejudice  to  the  rest  of  the  creditors,, 
and  set-off  this  debt. 

The  broker  was  in  the  nature  of  an  assignee  of  a  bond,  or  indorsee  of  a  promissory 
note.  And  it  was  determined  in  the  case  of  Marsh  and  another,  assignees  of  May, 
against  C/jai«ier;?,(c)  til  at  a  note,  indorsed  to  the  debtor  of  a  bankrupt  after  the 
bankruptcy,  could  not  be  set-off.     So  here,  whatever  interest  the  broker  had  in  the 

Eolicy  as  against  the  plaintiffs,  it  accrued  afterpayment  of  the  loss  to  his  principal ; 
ut  that  interest,  being  transferred  subsequent  to  the  bankiniptcy,  could  not  be  set- 
off against  a  debt  vested  before.  At  all  events,  it  was  setting  up  a  debt  in  right  of 
another  person  against  a  pei'sonal  demand  upon  himself. 

That  upon  the  whole,  whatever  difference  the  commision  del  credere  miglit  make 
between  the  broker  and  his  employers,  it  could  make  none  between  the  present  par- 
lies. Tlie  transaction  between  them  would  have  been  exactly  the  same,  if  no  such 
commission  had  existed ;  audit  was  too  much  to  contend  that  a  private  agreement  be- 
tween two  of  the  parties,  without  the  knowledge  of  tlie  third,  should  vary  the  na- 
ture of  the  contract,  and  materially  affect  and  injure  the  rights  of  his  creditors. 

Smith,  contra,  distinguished  this  case  from  that  of  Wilson  and  another,  assignees,, 
against  Creighton  ;  for  here,  the  broker  was  the  only  person  who  had  any  dealings 
with  the  bankrupt;  his  name  alone  was  inserted  in  the  policy;  no  other  person  was 
known  to  the  bankrupt,  who  must  therefore  liave  treated  with  him  as  principal ;  and 
who,  it  was  more  natural  to  suppose,  gave  the  credit  to  him,  than  to  any  other  per- 
son, to  whom,  from  the  nature  of  the  transaction,  he  must  liave  been  an  utter 
stranger. 

He  obser\'ed  that  this  case  was  very  different  from  that  of  sureties;  fortherethe 
obligee  relied  upon  the  principal ;  the  whole  dealing  was  witli  him  ;  and  he  only, 
looked  to  the  other  as  a  collateral  security ;  but  here  tlie  broker  was  liable  in  the 
first  instance. 

He  was  then  stopped  by  the  court. 

Lord  Mansfield,  Cli.  J.  The  whole  turns  on  the  nature  of  a  commission 
del  credere  Then  what  is  it?  It  is  an  absolute  engagement  to  the  principal  from 
the  broker,  and  makes  him  liable  in  the  first  instance.  There  is  no  occasion  for  the 
principal  to  commimlcate  with  the  underwriter,  though  the  law  allows  the  prin- 
cipal, for  his  benefit,  to  resort  to  him  as  a  collateral  securit}'.  But  the  broker  is 
liable  at  all  events. 

BuLLER,  J.  I  remember  many  actions  broug-ht  at  Guildhall  against  brokers 
with  commissions  del  credere;  and  I  never  heard  any  inquiry  made  in  such  cases, 

(a)  Vide  19  Geo.  2.  c.  37.  (h)  Vide  Young  and  another  v.  Hockley,  3  Wils.  .346. 
(c)  2  Stra.  1234. 


APPENDIX.  -27 

whether  there  had  been  vl  previous  demand  upon  the  under\^Titer  and  refusal ; 
and  I  can  venture-  to  say,  tliat  such  is  not  the  practice.  It  makes  no  dm'ercnce  at 
the  time  of  makint^  the  policy,  whether  the  underwriter  knew  the  principal  or  not; 
he  trusted  to  the  broker;  the  credit  was  given  to  him,  and  not  to  the  otlier. 

I  agree  that  tlie  notice  of  set-oti  is  bad;  but  tliis  loss  may  be  proved  and  set-off 
imdei  tlie  general  issue  of  the  2Sth  sccti(jn  of  the  5  Geo.  2.  c.  30.  The  words  of 
that  section  are,  "  That  where  it  sh;dl  appear  to  the  cf/mmissioners,  ortiie  major 
*'  part  of  them,  that  there  hath  been  nuitual  credits  given  by  the  bankrupt  and  any 
*'  other  person,  or  nmtual  debts  between  the  bankriijit  andain other  person,  at  any 
*'  time  before  such  person  become  bankrupt,  the  said  commissioners,  &.c.  shall  state 
"  the  account  between  them,  and  one  debt  may  be  set  against  another,  and  what 
"  shall  appear  to  be  due  on  either  side  on  the  balance  of  such  account,  and  no  more, 
"  shall  be  claimed,  and  ])aid  on  either  side  respectively." 

Therefore  we  see  by  tliis  section  of  tiie  statute  that  the  assignees  could  legal- 
ly claim  no  more  than  the  balance  upon  tlie  account  between  tlie  parties. 

judgment  for  tlie  defendant. (n) 

Bize  V.  Dickason  and  Jnother^,  Assignees  of  Bartenshlag^  T.  T.  26  Geo.  HI. 
J.  D.  1786.  1.  T.  R.  285. 

THIS  was  an  action  for  money  had  and  received  by  the  defendants,  as  .is- 
signees  of  the  bankrupt,   f-ir" the  plaintifl''s  use.     Plea,  the  general  issue. 

The  cause  came  on  to  be  tried  at  the  sittings  .after  Easter  Term,  1787,  at  Guild- 
hall, London,  before  Buller,  Justice,  wlien  the  jury  found  a  verdict  for  the  jdaintiff; 
damages  661/.  9*.  IQd.  and  costs  40^'.  subject  to  the  opinion  of  the  court  on  tlie 
following  case : 

That  the  bankrupt,  John  RoJolph  Bartenshlag,he\ng an  underwriter,  subscribed 
policies  filled  up  with  the  plauititl  's  n:ime  for  his  foreign  correspondents,  who  were 
unknown  to  the  bankrupt. 

Tliat  losses  happened  on  such  policies  to  the  amoimt  of  655/.  9*.  7d.  before  thf 
hankruptcy  of  Bartcnshlag,  and  were  adjusted  by  him.  That  a  loss  on  another  policy 
t')  the  .amount  of  61.  Os.  3d.  happened  hforr  the  ■■said  bankruptcy,  but  xaat  not  adjusted 
till  lifter  such  bankruptcy. 

That  tlie  plaintifl'pai'd  the  amount  of  tlie  losses  to  his  foreig-n  correspondents  after 

such  bankruptcv. 

That  the  plaintiff  had  a  commission  */ cm/crc  from  his  coiTcspondcnts ;  wax 
m.ade  debtor  by  the  bankrupt  for  the  premiums;  and  always  retained  the  policies 
in  his  hands.  .    . 

That  a  divi<lend  of  lOs.  in  the  pound  was  declared  under  the  said  commission  o« 
the  15th  of  June  1782.  ,  .     .«.       ,     ,      , 

That  at  llie  time  of  the  bankruptcv  there  was  due  from  '.lie  plamtitt  to  tlie  bank- 
rupt the  sum  of  1.356/.  Oo-.  3d.  Aiid  there  was  due  from  the  bankrupt  for  the  above 
losses  661/.  9„'.  \0d.  .       ,   ^      , 

That  on  the  15Ui  M^rcli  1782,  tlie  philnliff  paid  to  the  defendants  the  stim  ol 
750/.  and  on  the  17tii  November  1785,  the  furilier  sum  of  606/.  Os.  3d.  amounting 

to  1356/.  Os.  3d.  ,    ,  ■  ,  c  ff,,  r, 

And  on  tlie  18th  November  1785,  the  plaintiH  proved  the  said  sum  of  661/.  9s. 
lOd.  under  the  said  commission.  .     . 

That  the  plaintiff  never  received  any  dividend  under  tlic  comnusHioii  »<.r  or  on 
account  of  tiic  said  losses.  ,     ■        i  i      .u 

That  a  final  dividend  of  the  edicts  of  the  said  bankrupt  wiu  declared  by  the 
said  commissioners  on  tlie  24th  diiV  of  January  1786. 

That  on  the  first  of  Febniarv  17H6,  previous  to  surli  dividend  being  paid,  the 
pUintlHcaused  a  notice  to  be  served  on  tin-  <k-fiii<lants.  purporting  that  he  \mi\  haul 
them  the  said  sum  of  1.156/.  Os.  3d.  under  a  viistahn  idea,  uillu.ut  drl„ct,„_i;  il.< re- 
from  the  said  661/.  9*.  lOd.  for  Uic  aforesaid  lox.ses  on  the  said  sexcral  policies,  sub- 

CaJ  Vid.  £izr  v.  Uick(Ufon  and  another,  Assi^'neoii  of  Barttruhlag,  post. 


^8  APPEUBlX. 

scribed  by  the  bankrupt,  for  whom  he  was  del  credere  to  the  said  foreign  corrcspor*- 
dents,  and  had  jKiid  sucli  losses  according-ly ;  and  cautioning- them  ag-ainst  niaking 
any  dividend  until  he  was  paid  the  said  sum  of  661/.  9,?.  lOd. 

Tliat  there  are  now  in  tlie  hands  of  the  said  defendants  ciTects  of  the  bankrupt 
more  than  sufiicient  to  satisfy  the  demand  of  tlie  phiintitf. 

The  question  for  tlie  opinion  of  the  court  is,  AVb.et'.ier  the  plaintifi'is  entitled  to 
recover  in  tliis  action  ?  If  the  phiiutitf  is  entitled  to  recover  in  this  action  the 
verdict  to  stand.  But  if  tlie  court  shall  be  of  opinion  that  the  plaintill'  is  not 
entitled  to  recover,  then  a  verdict  to  be  entered  for  the  defendants. 

Smith  was  to  have  argued  for  the  plaintifij  but  MingayiovXhe  defendants  declin- 
ed arguing  the  case. 

TJie  court  were  of  opinion  that  it  came  within  the  principle  of  the  case  of  Grove 
and  Dubois.{a)     And 

Lord  Mansfield,  Ch.  J.  said,  the  rule  had  alvvav's  been,  that  if  a  man  has  actu-. 
ally  paid  what  the  law  would  not  have  compelled  him  to  pay,  but  wliat  in  equity 
and  conscience  he  ought,  he  cannot  recover  it  back  again  in  an  action  for  money 
had  and  received.  So  where  a  man  has  paid  a  debt,  which  would  otherwise  have 
beer,  barred  by  the  statute  of  limitations  ;  or  a  debt  contracted  during  his  infa,ncy, 
which  in  justice  he  ought  to  discharge,  though  the  law  would  not  have  compelled 
the  pa3'ment,  yet  the  money  being  paid,  it  will  not  oblige  the  payee  to  refund  it. 
But  where  money  is  paid  under  a  mistake,  which  there  was  no  ground  to  claim  ia 
conscienccj  the  party  may  recover  it  back  ag-ain  by  tliis  kind  of  action. 

Judgment  for  the  plaintiff- ' 

Mdiorucchi  v.  R.  Exchange  Assurance  Company,  T.  T.  1728.  I  Eg.  Abr.  8o 

THE  plaintiffs  were  assignees  under  a  commission  of  bankruptcy  awarded  against 
Sir  Justus  Bed,  and  brought  this  bill  against  the  defendants,  to  compel  them 
to  assign  and  transfer  to  the  plaintifis  several  shares  in  their  stock,  to  which  Sir 
jritjtus  Bed  was  entitled,  and  which  in  the  year  1720  cost  him  between  10  and 
1200/.  The  defendants  bjr  answer  insisted,  that  S\v  Justus  Bed  was  one  of  the 
directors  of  their  company,  and  that  in  the  year  1720,  after  his  purchase  of  the  be- 
fore-mentioned stock,  the  company  I  nt  him  about  12,000/.  and  insisted,  tliat  they 
oug-lit  not  to  be  obliged  to  let  the  phantitts  transferor  dispose  of  the  interest  which 
Sir  Justus  had  in  their  stock,  without  payment  of  the  12,000/.  borrowed,  and  that 
by  virtue  of  the  act  5  Geo.  1.  one  account  ought  to  be  set-off  against  the  other  ;  and 
for  that  purpose  they  liad  come  in  as  creditors  under  the  commission  of  bankrupt- 
cy, and  had  proved  their  debt ;  there  was  no  pretence  that  the  m.oncy  was  lent  on 
the  security  of  the  stock  ;  but  it  was  insisted,  that  on  the  credit  of  the  great 
parcel  of  stock,  which  Sir  Justus  had  in  tlieir  company  at  tliat  time,  that 
they  lent  him  this  money,  and  therefore  would  now  stop  his  stock  till  payment 
thereof,  or  as  far  as  the  value  of  the  stock  would  extend,  which  now  by 
the  great  fall  of  the  stocks  would  by  no  means  sati.sfy  their  debt ;  but  it  was  de- 
creed at  the  Rolls,  and  that  decree,  on  an  appeal,  affu-med  by  the  Lord  Chancellor, 
that  the  defendants  ought  to  permit  the  plaintiffs,  the  assignees,  to  transfer  and 
dispose  of  the  stock  for  the  most  they  could  make  of  it,  and  that  they  could  not  stop 
or  retain  the  stock  for  their  satisfaction,  either  before  or  by  virtue  of  the  statute  5 
Geo.  1.  And  it  was  resembled  to  the  case  of  the  lord  of  a  manor  and  his  copy- 
holders, that  the  lord  could  not  refuse  to  admit  a  person  to  whom  one  of  the  copy- 
holders had  sold  his  estate,  on  account  of  any  debt  due  to  the  lord  by  that  copy- 
holder ;  that  as  the  lord  of  the  manor  in  that  case,  though  he  had  the  freehold  of 
3,11  the  copyhold  estates  in  him,  yet  he  had  no  right  to  any  of  the  copyholders  pri- 
vate copyhold  ;  so  here,  though  the  company  had  the  whole  stock  of  the  company 
in  them  in  their  corporate  capacity,  yet  the  stock  of  each  proprietor  was  distinct, 
and  veyted  only  in  himself,  wherewith  the  company  had  nothing  to  do  fuilher  than 

(a)  Jnte^  112. 


APPENDIX.  29^ 

they  Vrere  Invested  therewith  by  the  charter,  or  act  of  parliament  \vhere^vith  they 
were  incorpoi'ated  and  impowcred,  or  oi-dei  cd  to  transfer  each  one's  slock  by  trans- 
fers to  be  made  in  the  books  of  tlie  comjiany  ;  \\hich  otherwise  every  ])io]irictor 
might  by  deed,  orotlierwise,  have  transferri-d  as  he  thouglit  fit.  And  it  was  held, 
that  this  case  differed  from  that  of  the  HuJson's  Bnv  Company,  decreed /jer  Lord 
Chancellor,  assisted  bv  JRay-nionJ,  C.  J.  and  Mr.  Justice  Price,  whore  tiu-re  was  an 
express  bye -law  to  subject  the  stork  o\'  each  uicniber  to  satisfy  the  debts  tiiev  should 
owe  to  the  company.  And  it  was  said,  that  this  was  not  like  the  case  oi'  Dtmanary 
and  Metcalf,  where  a  banker  lent  300/.  on  a  ])Kdg-e  of  jewels,  and  afterwanls  lent 
the  same  person  a  farther  sum  of  money  on  his  bare  note  ;  yet  he  was  not  admitted 
to  redeem  the  jewels  without  payment  of  the  note  likewise  ;  for  there  it  was  be* 
tween  two  private  persons.  And  it  was  iicld  not  to  be  within  the  statute  of  5  Geo.  1. 
■wOiich  speaks  only  of  mutual  dealing's  and  accovnUs,  which  is  not  this  case,  as  Sir 
Justus  had  a  fixed  permanent  interest  in  the  stock,  and  the  money  borrowed  with- 
out regard  thereto.  And  the  court  held  this  was  not  like  the  case  of  partr<  rship, 
where  if  anv  of  the  partners  borrowed  any  of  tlie  partnership's  money,  his  own 
shai-e  should  be  answerable  for  it,  and  he  should  not  be  |)erniitted  to  come  into  a 
coui't  of  equitv,  and  pray  an  account  of  his  share  of  the  jj.a-tnership  slock,  and  et- 
fects,  without  making- satisfaction  for  the  debt  he  owed  to  the  paitncrship  ;  forthie 
was  a  transaction  between  them  as  private  persons,  and  on  a  mutual  credit  and 
trust ;  but  the  loan  of  the  12,000/.  in  the  jjrcsent  casj  to  'i'w  Justus,  was  not  in  their 
coqjorate  capacitv,  wherein  only  he  stood  related  to  them,  and  held  his  stock,  b-,it 
was  a  loan  by  them  as  private  persons,  for  which  they  could  not  stop  his  stock, 
which  he  held  as  a  member  of  the  company  in  their  corporate  capacity. 

Geort^e  v.  Cla^get  and  Another,    T.  T.  37  Geo.  III.  J.  D.  1797.  7  Ttrm 

Rep.  Z59. 

ON  the  trial  of  this  action,  which  was  assumpsit  P)r  goods  sold  and  delivered  fo 
the  amount  of  142/.  1*.  9</.  before  Lord  Keiiyon  at  tlie  Guildhall  sittings,  tlie 
case  appeared  to  be  this  :  The  plaintiff,  a  clotliicr  at  Frome,  employed  Messrs.  Rich 
and  Hcapv  in  London,  Blackwell-hall  factors,  as  his  factors  under  a  commissiou 
del  credere,  who  besides  acting  as  factors  bought  and  sold  great  {luantities  of  wool- 
len cloths  ontheirown  account,  all  their  business  being  carried  on  at  one  warehouse. 
The  factors  sold  at  twelve  months  credit,  and  were  allowed  two  and  a  half  per  cent 
On  the  oOth  of  September  1795,  De'.valle,  a  tobacco  broker,  and  wlio  iiad  bet  n  iu 
habits  of  dealing  with  the  defendants,  iK)ught  several  parcels  of  tobacco  of  them 
Cind  gave  them  in  paxinent  a  bill  of  exchange  f)r  1198/.  16*.  drawn  i)y  one  I-ialieron 
Bull  and  Hcapy  on  the  24lh  of  September  1795,  payable  two  months  after  date  to 
J.  Stafford,  who  indorsed  to  Dclvalk,  who  indorsed  it  over  to  the  defendants,  it 
having  been  previously  accepted  by  Rich  and  Hcapy.  On  the  12th  of  October  179.'>. 
the  defendants  bought  a  quantity  of  woollen  cloths  for  exportation  <if  Rich  and 
Heap;,  amounting  to  12.37/.  18*.  3(/.  at  twelve  months  credit  ;  the  goods  were  taken 
out  o'f  one  general  mass  in  Rich  and  Heapfs  warehouse  ;  Rich  and  //<-(//;•  made  out 
a  bill  of  parcels  f.rthe  whole  in  their  own  names,  and  tiie  def.iidants  ditl  not  know 
tliat  any  part  of  the  goods  belonged  to  the  plainlHr.  Early  in  NovemI)er  179.\  Rich 
and  Ht-apy  became  bankrupts  ;  and  afterwards  on  the  20th  of  tlie  same  nxmth  the 
plaintifT  gave  tlie  defendants  notice  not  to  pay  Rich  and  Ihapy  for  certain  clotli-i 
specified,  part  of  the  above,  amounting  to  142/.  1*.  9./.  tluy  having  been  his  jiro- 
perty,  and  having  been  sold  on  his  account  by  Rich  and  Iliapyun  commission.  Tlip 
question  was  whether  the  defendants  were  or  were  not  entitled  to  sel-ofi  their  <lc- 
mand  against  Rich  and  Heapy  on  the  bill  of  exchange,  on  the  gi-ound  that  the  de 
fendants  dealt  wilii  them  as  i)rlncipals.  Lord  Kinyou  was  of  opinion  that  they 
were,  as  well  on  principle  as  on  the  authority  of  Ruhoncv.  Williavis  ,\ti)  and  a  vcr 
diet  was  accordingly  found  for  the  defendants. 

(a)  Rabon'e  jun.  V.  Wii.i.TAMs,  Middlesex  sittings  aflor  Mich.  1785;  whi.I. 
wasthus  stated.— Action  forthe  value  of  goods  sold  tothe  <hf.n<h.nt  by  meansofthe 
house  (>f  Rahoni- si-n.  and  C.  at  F^xeter,  factors  to  the  plaintUr  The  defendant,  iIk* 
v(  ndee  of  the  goods,  set-ofl'a  debt  due  to  him  from  Rnh„nr  and  Co.  the  factors,  iijx.n 
anotiier  accoimf,  all.gingtii.-it  the  plaintifl  had  not  appeared  at  :dl  in  the  tranNaction. 
and  th'.-  credit  had  ijccn  given  by  Rabonc  and  Co.  the  factors,  and  not  by  tJjc  plainlilT 


so  APPENDIX. 

A  rule  having'  been  obtained,  calling-  on  the  defendants  to  shew  CRuse  why  the 
verdict  should  not  be  set  aside,  and  a  new  trial  had,  on  the  autliority  of  the  case 
of  Estcott  V.  Mihuard,  Co.  Bank.  Laws  236, 

Gi/>/js  and  Giles  were  now  to  have  shewn  cause  against  that  rule  :  but 

Erskine  and  Walton  were  called  upon  to  su;)port  it.  Tiiey  relied  on  the  cases  of 
Scrims/lire  v.  Jl.ierton,(a)  and  Estcott  v.  Miliuard,  as  reported  in  Co.  Bani.  Laivs, 
to  shew  that  under  the  circumstances  of  this  case  the  principal  mig'ht  resort  to  the 
buyer  at  once,  he  iiaving-  given  notice  before  actual  payment  by  the  defendants  ta 
the  factors. 

But  a  more  accurate  note  of  tlie  case  of  Estcott  v.  Miliuard(l))  having  now  been 
•btained  from  Mr.  J.  Bulltr,  before  whom  that  cause  was  tried,  and  read. 

Tile  court  were  clearly  of  opinion  that  the  directions  given  by  the  learned  judge 
on  the  trial  of  this  cause  were  right ;  and  tliat  this  case  was  not  distinguishable  from 
tliat  of  Rabone  v.  Williams.     Therefore  they  discharged  the  rule.(c) 

Millisent  Shijiman  v.  J.  Thomfison^    T.  T.   11  and  12  Geo.  II.  C.  P.  J.  D, 

1738.      IVilles''  Reji.  103. 

THIS  came  before  the  court  on  a  case  reserved  at  the  trial  before  Mr.  Baron 
Fortescuc. 

The  plaintiif 's  late  husband  by  his  will  made  the  plaintiff  and  Dr.  Morgan  (since 
deceased)  his  executors.  In  his  life-time  he  had  appointed  the  defendant  his 
steward  by  letter  of  attorney,  who  after  the  testator's  death  received  of  several  te- 
nants several  sums  of  money  due  to  the  testator  in  his  life -time.  The  plaintiff 
brouglit  this  action  in  her  own  name,  not  naming  herself  executrix,  for  the  money 
so  received.  The  defendant  gave  notice  to  set-off  several  sums  due  from  the  tes- 
tator to  him,  which  the  judge  would  not  permit  the  defendant  to  set-off. 

The  questions  reserved  were  ;  1st.  Whether  the  plaintiff  sould  not  have  declar- 
ed as  executrix ; 

Lord  Mansfield,  Ch.  J. — '*  Where  a  factor,  dealing  for  a  principal  but  concealing 
that  principal,  delivers  goods  In  his  own  name,  the  person  contracting  with  him 
has  a  right  to  consider  him  to  all  intents  and  purposes  as  tlie  principal ;  and  though 
the  real  principal  may  appear  and  bring  an  action  ujion  that  contract  against  tlie  pur- 
ch'.ser  of  the  goods,  yet  that  purchaser  may  set-off  any  claim  he  may  have  against 
the  fiictor  In  answer  to  the  demand  of  the  principal.  Tills  has  been  long  settled." 
Upon  this  opinion,  the  rest,  being  a  mere  matter  of  account,  was  referred.  In 
Bayley  v.  Morley,  London  sittings  after  Mich.  1788,  Lord  Kenyan  recognized  the 
law  of  tliis  case. 

(a)  2  Str.  1182. 

{b)  London  sittings  after  Mich.  1783.  Action  for  goods  sold.  The  goods  were 
sold  by  Farrar  a  corn  factor,  who  gave  no  account  of  the  sale  to  tlie  plaintiff,  nor 
made  any  entry  of  It  In  ills  books.  He  was  insolvent  for  some  time  before,  had 
avoided  all  dealing  for  a  month,  had  desired  tliat  tliere  might  be  no  buying  in  Ms 
name,  and  had  not  dealt  with  the  defendant  for  a  year  before,  but  was  then  In  his 
debt.     There  was  a  verdict  for  the  plaintiff  on  the  ground  of  fraud. 

(c)  The  same  point  was  also  ruled  by  Lord  Kenyon  in  Stracey,  Ross,  and  others, 
V.  Decy,  London  sittings  after  Mich.  1789.  Assumpsit  for  goods  sold  ;  pleas  non 
assumpsit  and  a  set-oft'.  The  plalntlft's  jointly  carried  on  trade  as  grocers,  but  Ross 
was  the  only  ostensible  person  engaged  in  the  business,  and  appeared  to  the  world 
as  solely  interested  therein.  By  the  terms  of  the  partnership  Ross  was  to  be  the 
apparent  trader,  and  the  others  were  to  remain  mere  sleeping  partners.  The  de- 
fendant was  a  policy  broker,  and  being  indebted  for  grocery  (as  he  conceived)  to 
Ross,  he  effected  insurances  and  paid  premiums  on  account  of  Ross  solely,  to  the 
amount  of  his  debt,  under  the  Idea  that  one  demand  might  be  set-off  against  the 
other.  Ross's  aftalrs  being  much  deranged,  payment  of  the  money  due  from  tlie 
defendant  was  demanded  by  the  firm,  and  was  refused  by  him  upon  the  ground  of 
his  having  been  deceived  by  the  other  partners  keeping  back  and  holding  out  Ross 
as  tlie  only  person  concerned  in  the  trade.  Lord  Kenyon  Ch.  J.  was  of  opinion  that 
as  the  defendant  had  a  good  defence  by  way  of  set-oft'  as  against  Ross,  and  had  been 
by  the  conduct  of  the  plaintiffs  led  to  believe  that  Ross  was  the  only  person  he  con- 
tracted with,  they  coidd  not  now  pull  off  the  mask  and  claim  payment  of  debts  sup- 
posed to  be  due  to  i?ojj  alone,  without  allowing  the  parties  the  same  advantages 
and  eqoities  in  their  defence  that  they  would  have  had  in  actions  brought  by  Ross. 

■Verdict  for  the  defendant. 


APPENDIX,  31 

•2(lly.  Whether  the  defendant  ousjht  not  to  have  been  permitted  to  set-off  the 
money  due  to  him  from  the  testator. 

The  Court,  after  argument,  gave  judgment  for  the  plaintiff.(fl) 

(a)  The  reasons  given  by  the  Court  of  Common  Pleas  do  not  appear  in  Lord 
Chief  Justice  fF/Z/e.?' papers  ;but  the  same  case  was;  referred  to  tlie  ()])inioii  of  Mr. 
B.  Furtcsate^l)  before  whom  the  cause  was  tried,  and  wlio,  in  the  Ea.'itcr  term  i>re-. 
ceding,  after  liearing  the  case  argued  by  Mr.  Makepeace  for  the  defenchml,  and  Sir 
T.  Abney  for  the  plaintiff,  gave  the  following  judgment  in  favour  of  the  i)laiiUiif.  : 

"  It  is  insisted  on  for  the  defendant  that  this  money  received  by  hint  is  vested  iu 
the  executrix  in  auter  droit,  that  as  sh6  hatli  no  riglit  of  her  own  tiie  action  nuist 
foUowthe  right,  and  that  therefore  she  s]iouldha\c  brouglit  the  action  ascxeciitiix 
and  not  in  her  own  right.  And  the  case  of  H-.ntov.,  cited  in  6  Mod.  4.  was  cited,  where 
it  is  said  if  executor  bring  trover  and  dcctare  that  he  is  possessed  as  executor  to  y.  S.  if  on 
evidence  it  appear  that  they  were  his  own  goods  he  sliail  be  nonsuited  and  pay  costs; 
and  it  was  insisted  thai  by  a  parity  of  rcascming  where  llie  executor  brings  an  ac- 
tion in  his  own  name  and  it  appears  that  they  were  tlie  goods  of  the  testator,  he 
ought  to  be  nonsuited.  As  to  this  ;  there  is  no  <loubt  but  tliat  the  jilaintiflin  this 
case  is  entitled  to  all  the  effects  of  the  testator  in  auler  droit,  and  all  executoi-s 
are  :  but  if  this  were  a  imiversal  rule  tbattiiercibre  the  action  must  follow  the  right 
and  be  brouglit  as  executor,  the  executor  could  in  no  case  bring  an  action  in  his 
own  name  for  any  goods  or  effects  of  the  testator,  which  in  some  cxses  it  is  certain 
that  he  may.  As  where  the  testator's  goods  are  taken  out  of  the  possession  of  the 
executor,  he  may  bring  trover  in  his  own  name, (2)  because  it  is  an  immediate  tort 
to  him,  though  he  is  possessed  of  these  goods  in  auter  di-oit.  By  this  also  it  ap])eai-s 
tliat  it  is  not  a  necessary  consequence  that,  because  if  the  action  is  brought  in  the 
plaintiff 's  name  as  executor  and  the  goods  appear  to  be  his  own  iic  must  be  i\onsuit- 
cd,  therefore  he  must  be  nonsuited  if  he  bring  the  action  in  his  own  name  and  the 
g'oods  appear  to  be  the  testator's  ;  for  in  that  case  it  is  manifest  that  he  cannot  re- 
cover his  own  goods  as  executor,  :ukI  fails  in  proving  his  cause  of  action  which  was 
to  recover  the  goods  as  the  goods  of  the  testator. 

But  the  true  distinction,  I  think,  is  this,  that  where  the  thing  sued  for  is  assets  in 
the  hands  of  the  executor  or  administrator  before  the  recovery,  or  where  tlie  cause 
of  action  arises  in  the  executor's  own  time  and  never  did  arise  to  the  testator,  there 
the  executor  may  bring  the  action  either  in  his  own  name  or  as  executor.  And  this 
is  laid  down  as  law  in  the  case  oi'  yenkins  and  his  wife  v.  Fionihe,  Sa.'J^.  207.  but  bet- 
ter and  more  fully  reported  in  6  Mod.  92,  181.  That  was  an  action  brought  by  the 
husband  and  wife  as  executrix  upon  an  indebitatus  assumpsit  for  money  had  and  re- 
ceived by  the  defendant  to  their  use  as  executrix  :  it  is  true  that  the  judgment  of 
the  court  was  only  that  upon  beingnonsuited  the  plaintiffs  ouglitto  pay  costs  :  but  the 
reason  of  the  judgment  was  bccaiiJiC  they  might  have  brought  the  action  in  their 
own  name  and  not  as  executri.x  ;  for  wIk  rever  an  executor  may  have  the  actiriu  iu 
his  own  name  he  shall  pay  costs.  And  the  case  of  Eares  v.  Mocato,  Salt.  .314.  was 
cited  tiiere,  and  this  difference  taken,  that  there  were  several  counts  by  tlie  plain- 
tiff as  executor,  one  whereof  was  an  insimul  coniputasset,  and  being  noubuitcd  be 

(1)  It  seems  to  have  been  not  unusual  at  this  time  to  refer  the  case  at  first  to  the 
judge  who  tric<l  the  cause,  and  aftcrv,  ards  to  the  court  if  the  pai-ties  were  dis- 
.■<atisfied  with  iiis  opinion. 

(2)  So  in  an  action  of  a.ssumpsit  brought  on  a  foreign  judgment  recovered  by  the 
executor,  the  plaintiff' may  declare  in  his  own  right,  and  not  us  executor  ;  C/av-Jord 
V.  Whittal,  H.  1.J  G.  3.  B.  R.  Douf^l.  4.  n. — So  an  executor  may  maintain  an  action  in 
his  own  name  agiiinst  a  sheriff' forthe  escape  of  a  prisoner  who  was  in  execution  on 
a  judgment  obtained  by  him  as  executor ;  Bouajuui  v.  Walker,  2  Duvnf.  &  11.  126- 
(contr;uj-  to  Gloxer  v.  Kendal,  1  Lut::.  Sy.'l ;  Ucyncll  v.  Langcastle,  Ciu.  Jac.  54J  ; 
Broohtu  \.  Cooke,  \  Sho\.\  57  ;  and  lVat\.  v.  Drijyf,   1  Ld.  JRayni.  35.) — So  where  an 

oxecutor  pays  money  which  he  was  not  (-ol:,;  i  to  pa\,  and  afterwardn  brings  an 
at  tion  to  recovt-r  it  back,  he  may  declare  i  i  i.i.-.  "vni  right ;  Mint  v.  Stotet,  4  JJurrJ 
&  /,'.  561 — And  if  an  executor  bring  trovr  'jii  a  conversion  in  liis  own  time,  or  u>- 
suinpsit  for  money  received  aft<r  tiic  l<  :.t;itor*»  deatli,  and  fail,  he  is  liable  ti<  pay 
costs  though  he  name  himu'lf  cX'cytor  ;  Atiiy  v.  Heard,  Cro.  Car.  219  ;  Anonynout, 
1  Vtntr.  lO'J;  Uui>u\.  Hannc.  U'P  ienip-  Jlard-u:  204;  Guidtliwaytc  v.  Fctiie,  r, 
Iktrnf.  ik.  E.  234  ;  ^nd  Bdlard  v.  Spimctr.  7  D.  St  f..  358.  io  which  'lunt  cane  a  con- 
li-ary  tJelcrmioAiiou  hi  tvtMrtV  v.  Kyxm-l'^r.^  4  i>  &  k-  "277.  v:m  «vet  -rjlejl 


32'  APPENDIX. 

paid  no  costs,  because  there  was  no  wtTt'  cause  of  action,  bnt  anew  action  asceHain- 
ing  the  ancient  cau.sv ,  wliich  is  still  a  debt  of  the  testatm's.  And  in  the  case  of 
yenkitii  V.  Ploinbe,  as  appears  from  Salkeld,  this  distinction  of  insimul  computasset 
is  also  taken  ;  and  it  was  Siiid  that  if  the  defendant  received  this  money  by  the  ap- 
pointment of  the  plaintiOi  it  was  assets  immediately,  if  without  his  consent  yet  the 
bringing'  of  the  action  is  such  a  consent  that  upon  judgement  it  shall  be  assets  im- 
mediately before  execution,  which  otherwise  it  would  not  be  until  after  execution  ; 
and  the  reason  is  because  it  is  recovered  at;-ainst  a  person  who  never  was  indebted 
to  the  testator,  and  the  ,>riij;inal  debt  was  discharged. 

To  apply  this  to  the  present  case  ;  here  is  money  received  by  the  defendant  since 
the  testator's  death,  and  tlu  rcfore  it  could  not  be  received  to  the  use  of  the  testa-' 
toi',  but  mast  be  received  to  the  use  of  the  executor.  The  executor  has  consented 
bv  bringing  the  action,  and  the  money  is  assets  immediately  upon  the  judgment. 
It  is  c^uite  a  new  debt  created  from  the  defendant  to  the  executor  since  the  death 
of  the  testator,  and  anew  cause  of' action  which  was  not  subsisting  before.  The 
defendant  was  never  indebted  to  the  testator  for  this  money,  and  the  original  debt- 
ors, tlie  tenants,  are  distiiarged.  No  douijt  jiad  the  action  been  brought  against 
the  tenants,  it  must  have  been  brought  against  them  by  tlie  plaintiff  as  executrix, 
because  it  was  a  debt  as  to  tliem  subsisting  in  the  testator's  life -time,  and  no  new 
cause  of  action  arising  to  the  executrix. 

It  is  said  that,  as  this  case  of  yenkbis  v.  Plombe  is  stated  in  6  Modern,  Pcuell  J.  and 
Gould  J.  doiibted  :  but  whatever  they  might  have  done  on  the  first  argument,  it  is 
plain  they  were  satisfied  afterwiu-ds  ;  for  in  page  182  it  appears  that  the  judgment 
was  given  per  totam  curiam. 

It  is  said  that  the  defendant  had  an  authority  by  letter  of  attorney  to  receive  the 
testator's  rents,  that  this  authority  did  not  determine  with  the  testator's  death,  and 
that  therefore  as  Ihe  defendant  received  it  by  the  authority  of  the  testator  it  is  mo- 
ney had  and  received  to  his  use,  and  it  shall  not  be  presumed  to  have  been  received 
by  the  consent  of  the  executor.  But  I  think,  as  this  is  a  naked  authority  and  not 
coupled  with  any  interest,  it  coidd  not  subsist  after  the  testator's  death.  In  Combers 
case,  9  Pep.  76.  b.  it  was  resolved  th:it  where  a4pcrson  luis  authority  as  an  attorney 
to  do  an  act,  he  must  doit  in  the  name  of  him  who  gave  the  authority  ;  for  he  ap- 
points the  attorney  to  be  in  his  place  and  represent  his  person  ;  and  for  that  reason 
the  attorney  caniiot  act  in  his  own  name,  nor  do  it  as  his  own  act,  but  in  tlie  name 
and  as  the  act  of  him  who  gave  the  authority.  And  if  this  be  so,  it  is  impossible  to 
say  that  this  defendant  received  this  money  as  attorney  for  the  testator  or  that  he 
represented  his  person,  in  regard  that  the  testator  was  dead  ;  it  is  the  executrix 
only  who  represents  the  person  and  stands  in  the  place  of  the  testator. 

This  has  been  likened  to  the  case  of  an  assignee  of  a  bankrupt,  of  whom  it  is  said 
that  though  the  property  of  the  bankrupt's  goods  or  debts  be  vested  in  him,  yet  he 
Tnust  sue  as  assignee  ;  and  no  doubt  he  must  for  all  debts  due  to  the  bankrupt.  But 
if  goods  be  taken  from  the  assignee,  or  money  received  from  a  debtor  of  the  bank- 
rupt after  the  assignment,  I  do  not  know  that  it  has  been  any  where  adjudged  that 
an  action  brought  in  his  name  would  be  ill.  But  be  that  as  it  will,  this  is  the  case 
of  an  executrix  and  not  of  an  assignee  of  a  bankrupt,  and  it  was  (I  think)  plainly 
and  clearly  adjudged  in  the  case  of  ytnkins  v.  Plombe  that  an  executor  in  such  case 
may  bring  an  action  in  his  o\a\  name  ;  and  I  do  not  find  that  it  was  ever  adjudged 
to  the  contrary. 

With  reg-ard  to  the  case  of  Chapman  v.  Darby,  Carth.  232,  where  it  was  holdcn 
that,  where  the  plaintiff  brouglit  assumpsit  for  so  much  money  had  and  received  to 
his  use  as  administrator,  tlie  promise  was  not  ill  laid  ;  no  doubt  it  is  so,  and  so  al- 
lowed in  yenkins  v.  Plombe  that  the  plaintiff  may  bring  the  action  cither  way  ;  so 
that  this  case  of  Cliapman  v.  Darby  does  not  prove  that  tlie  administrator  may  not 
bring  the  action  in  his  own  name,  but  only  that  he  may  do  it  as  administrator  ;  and 
no  doubt  he  may  do  it  either  way.  As  to  the  case  of  Curry  v.  Stephenson,  Carth.  335. 
Holt  Ch.  J.  took  exception  to  the  declaration  tliat  it  was  not  well,  because  the  mo- 
ney was  received  after  the  death  of  the  intestate,  and  then  it  was  received  to  the 
use  of  the  plaintiff  generally,  and  not  as  administratrix;  and  the  point  was,  that 
though  it  was  received  by  the  defendant  after  the  intestate's  death,  yet  it  was  be- 
fore administration  granted  ;  and  this  is  t!ie  reason  on  which  the  book  seems  to  gp 
why  it  was  disallowed,  which  is  not  the  present  case. 

As  to  the  set-off;  we  cannot  consider  the  convenience  or  the  inconvenience  on 
one  side  or  the  other,  but  must  go  according  to  the  act ;  for  the  stat.  2  Geo.  2.  c.  22. 
s.  13.  says,  or  //"  either  party  sues  or  is  sued  as  executor  or  administrator  where  thei-e 
are  mutual  debts  between  the  testator  or  intestate  and  either  party,  one  debt  m.ay 
be  set  against  the  other  ,  so  that  it  is  confined  by  the  statute  expressly  to  cases 
where  the  suit  is  as  executor  or  administrator.  And  therefore  in  the  present  case 
the  suit  not  being  as  executor,  I  think  it  is  not  within  the  statute,  and  that  the  debts 


AfPENDlX.  33 

ColliTtB  x.Collins,  T.  T.  32  Geo.  II.  A.  D.  1759.  2  Burr.  820. 

THIS  WHS  an  action  of  debt  upon  bond. 
Tlic  condition  iippe.ared,  upon  Oyn,  to  be,  "to  p.ay  tlie  plaintiff  an  annuity  of 
♦'  10/.  a  year  during'  his  life  ;  and  likewise  to  maintain  him  in  meat,  drink,  washing 
"and  lodg-ing-,  in  the  dwcUinp^-liouse  at  CnindaU-End,  for  and  during  his  Life?* 

To  thi.?  declaration,  the  defendant  pleaded  (by  leave)  several  pleas. 

As  to  the  ]Kiyment  of  the  annuity  of  10/.  per  n/i/i!i/7i.— There  was  a  pica  of  a  stt- 
off ;  (viz.  that  only  69/.  is  due  to  tlie  j)laintilf  on  account  of  the  said  annuity  ;  and 
tliat  tJie  plaintiff  owes  him  more  than  60/.  viz.  500/.) 

As  to  the  maintaining  the  piaintifi'.  Sec. — There  was  a  jilea  that  the  plaintiff  left 
the  house  voluntarily,  and  did  not  board  and  lodge  in  the  house  :  so  that  lie  (the 
defendant)  was  not  obliged  to  board,  wasli  and  lodge  him.  But  the  dcfend:uit  avers 
tliat  he  was  always  ready  to  inaintaln  him,  &c.  at  and  ix  the  house.  [V.infra^ 

Tlie  plaintiff  demurs  :  and  the  defendant  joins  in  demurrer. 

The  latter  plea  depended  upon  the  words  of  the  condition  ;  which  was — "Tliat 
"  \f  Joseph  Collins  the  younger,  his  heirs  executors  or  administrators,  do  and  shall 
"  well  and  truly  pay  or  cause  to  be  paid'unto  Joseph  Collins  the  elder,  and  liis  as- 
"  signs,  yearly  and  every  year  during  his  life,  one  annuity  of  10/.  of  lawful  money 
'*  of  Great  Britain,  clear  of  all  taxes,  he.  on  tlie  25th  of  March  and  29th  of  Septem- 
"  Ijcr  yearly ;  and  if  the  said  yoseph  Collins  the  younger,  siiall  find,  provide  and  allow 
"  to  and  for  the  3\Cid  Joseph  Collins  the  elder,  good  and  sufficient  meat  drink  wash- 
"  ing  and  lodging  i.v  the  dvielling  house  at  CrunJull-End idovcaaid  ;  tlien  this  obliga- 
•'  tion  to  be  void  ;  but  if  default  shall  be  made  in  the  panncnt  of  the  said  annuity 
"  of  10/.  or  any  part  tlicreof,  at  or  upon  any  or  either  of  the  days  abovementioncd 
"  f  )r  tlie  payment  thereof;  or  if  he  the  said  yoseph  Collins  the  younger,  shall  ne- 
"  gleet  or  ref.ue  to  maintain  and  keep  the  said  yoseph  Collins  the  elder,  during  his 
"  natural  life  as  aforesaid  ;  then,  and  in  either  of  the  said  cases,  to  be  and  remain 
*'  in  full  f  u'cc  and  virtue." 

The  defendant  (liaving  leave  to  plead  several  pleas  &c.)  pleaded  a  set-off  (as 
19  before  mentif.ned)  to  the  former  part  of  the  condition,  which  was  for  payment  of 
the  annuity.  And  as  to  the  latter,  lie  pleaded  that  tlie  house  at  Crundall-End  was 
tlie  house  where  the  said  yoseph  Collins  the  younger,  dii-elt,  and  ever  since  has  dwelt, 
with  his  f:imily  ;  and  that  he  did  admit  the  said  yoseph  Ccllins  the  elder,  and  re- 
ceive him  into  tlie  said  house  ;  and  did  until  his  departure  aftcrmentloncd,  find 
provide  and  allow  to  the  said  yoseph  the  elder,  meat,  drink  &.c.  [in  the  >vords  of 
the  condition  :]  but  that  he  the  said  yoseph  the  elder,  of  his  own  accord,  departed 
from  tlie  said  house  at  Crundall-End,  and  has  ne^-er yet  returned,  to  be  there  provid- 
ed with  meat,  dririk,  &c.  fut  supra; J  nor  hatii  ever  required  to  be  provided  wit!» 
any,  or  to  havcfany   allowed,   'jheke.     And  the  said  y&j<-/»/i  tiie  young-cr,  has  «/- 

due  from  the  testator  to  the  defendant  cannot  be  set-off  against  this  plaintiff"  in  an 
action  brouglit  by  her  in  her  own  name,  and  not  as  executor.  And  supposing  this 
to  be  80,  it  was  urged  as  one  rea.son  wliy  the  action  liere  ought  to  have  been 
brought  by  the  jilaintiff  as  executrix  ;  but  this  statute  will  not  alter  the  law  as  to 
tliat  point  from  what  it  was  before  ;  and  if  the  statute  lias  not  ivmedied  all  the  in- 
conveniencics,  we  must  take  it  as  it  is,  and  cannot  (1  think)  extend  it  further. 

So  the  postca  must  be  delivered  to  tlie  jilaintift",  and  slie  nuiat  luiNe  her  judg- 
ment."    MS.  Mr.  Justice  W.  (tiien  Mr.  Baron)  Fortescue. 

To  the  above  Mr.'B.Forfcjcue  afterwards  added  this  note  ;  "  N.  B.  The  court  of: 
B.  C.  on  a  ca.se  made  were  of  the  same  opinion  as  to  both  points."  (1) 

(1.)  The  s.inie  point,  relative  to  the  set-off,  has  been  since  determined  by  the 
court  of  King's  Bcncii  in  two  cases,  Kihin^ion  v.  Stevenson,  East.  17M,  on  domiir- 
rtr;  and  Tegetmeycr  v.  Lumlcy,  Tr.  25  Ceo.  3.  on  a  motion  for  a  new  trial.  Vid.  ' 
J>o*t.2Gi.  But  a  debt  due  to  the  d(  f  n.lant  as  surviving  partner  r\\:\\  be  net-ofl 
ag"dlnst  a  demand  on  hiui  in  hi:)  owni  riglit  ;  Slifpcr  v.  Slidstone,  5  Durnf  &  E.  493 » 
&  e  coiiverso  a  debt  due  from  the  piaimiff  us  suniving  partner  to  the  defendant 
way  be  Het-off  against  a  debt  due  from  the  d'.-f.ndaiit  ^o  «ho  plaintiff  ilJ  lU5  ovrr 
yjgbt".     frerKh  v  Andrndts  6  D.  It  K.  382. 


34  APPENIJIX. 

ways  bepi  ready  to  have  (jrovidccl  the  said  yoseph  the  elder,  with  meat,  drink,  &c. 
Cut  supraj  AT  and  in  the  said  dwellhig-housc,  \i\\c\\a.i}i  not  departed,  or  would  have 
retm-ned  ihither  :  but  tiiat  he  always  has  refused  and  still  docs  refuse  to  returtii 
but  has  continued  absent  from  thence.  Therefore  he  could  not  provide  him  with 
meat,  drink,  &c.  Cut  supraj  at  or  i^  the  said  diveHing-house. 

To  tliis  plea  tlie  plaintilF  demurred  ;  and  the  defendant  joined  in  demiirrer. 
Mr.  Serjt.  Foolc,  on  behalf  of  the  plaintill',  aig-iied  tliat  this  case  of  an  annuity  or 
yearly  payment  does  not  fall  within  the  statute  of  8  G.  2.  c  24.  §  5.  concerninsf  set- 
offs ;  because  the  action  i^  not  brou^-lit  for  a  sum  complete  and  certain,  but  for  a 
part  of  a  growing  sum  payable /or  life,-  whcreoffuture  payinents  will  be  continual- 
ly be  coming  tlue. 

Now  if  tile  judgment  be  here  entered  for  the  remainder  (as  that  act  directs,)  It 
passes  in  rem  judicatam  ,■  and  the  plaintiff' cannot  recover  any  more,  on  any  future 
default  of  {)ayment  upon  the  same  bond. 

By  sec.  4.  of  this  act,  the  provision  forscttingmutual  debts  one  against  the  other, 
■svas  looked  uj)on  as  highly  just  and  reasonable  at  a// times  :  it  is  therefore  provid- 
ed that  the  clause  in  2  G.  '2.  c.  22.  "  for  setting  nmtual  debts  one  against  the 
other"  shall  be  and  remain  in  full  force  forever. 

Section  5.  of  this  act  of  8  G.  2.  c.  24,  provides  *'  that  by  virtue  of  the  said  clause 
"  in  2  G.  2.  c.  22.  (which  is  tlicreby  made  perpetual,)  mutual  debts  m.ay  be  set 
"  against  each  other,  either  by  being  pleaded  in  bar,  or  given  in  evidence  on  the 
"  general  issue,  in  the  manner  therein  mentioned,  notwithstanding  that  such  debts 
"  ai-e  deemed  in  law  to  be  of  a.  different  nature  ,■  unless  in  cases  wliere  eitlier  of  the 
"  said  debts  shall  accrue  by  reason  of  a  penalty  contained  in  any  bond  or  specialty; 
V  and  in  all  cases  where  either  the  debt  for  wJiicli  the  action  hath  been  or  shall  be 
"  brought,  or  the  debt  intended  to  be  set  against  the  same  hath  accrued  or  shall 
"  accrue  by  reason  of  imy  such  penalty,  the  debt  intended  to  be  set-off  shall  be 
"pleaded  in  bar,  in  which  plea  shall  be  shown  how  much  is  truly  and  justly  due 
"  on  either  side  :  and  in  case  t)ie  plaintiff'  shall  recover  in  any  such  action  or  suit, 
"judgment  shall  be  entered  for  no  more  than  shall  appear  to  fae  truly  and  justly 
"  £"''.  ^?  ^^^^  plaintiff,  after  one  debt  being  set  against  the  other  as  aforesaid." 

This  is  not  a  bond  conditioned  for  performance  of  covenants  or  agreements  con- 
tained in  any  deed  or  writing  :  it  contains  a  quite  different  and  distinct  condition- 
Tlie  present  action  is  an  action  of  debt  upon  a  bond  conditioned  to  pay  an  annuity 
and  maintain  a  parent. 

Mr.  Serj.  Hewitt  contra — This  is  a  new  case. 

The  setting-off  of  mutual  debts  arises  on  2  G.  2.  c.  22.  sec.  1.3.  (which  was  a  tem- 
porary act,)  and  on  8  G.  2.  c.  24.  gee.  4,  5.  (which  makes  the  former  perpetual.) 

This  last  section  (§  5.)  provides,  generally  "  That  luherever  the  debt  arises  upon 
*"  a  hand  or  specialty  'uith  a  penalty,  and  accrues  by  reason  of  such  penalty,  a  set-off 
**  maybe  pleaded,"  My  brother  Foole  says,  "  It  extends  only  to  cases  where  the 
"  debt  is  a  sum  certain."  But  the  words  of  the  act  are  general ,-  and  are  not  at  all 
confined  to  sums  certain.  And  the  plaintiff  mov  afterwards  recover,  for  subsequent 
deftiults  ;  notwithstanding  tlie  prior  judgment:  "for  \.\\c  penalty  will  always  remain  a 
4Hty. 

Ovvr  plea  covers  the  whole  demand. 

IMr.  Serj.  Poule  was  beginning  to  reply.  But  an  observation  having  been  made 
by  Mr.  Just.  Denison,  upon  t!ic  latter  part  of  the  condition  ; 

Mr.  Serj.  Hewitt  desired  it  might  stand  over  till  next  paper-day ;  (intending  to 
make  a  motion,  in  the  interim,  for  leave  to  amend.)  To  which  reqiiest  tlie  court 
agreed. 

Ultepius  CoNciT^iu.^r. 
On  the  next  paper-day,  (26th  June,)  Mr.  Serjeant  Poole  proceeded  in  his  reply  .- 
(Serjeant  Hewitt  not  having  moved  to  amend.)  He  argued  tliat  a  set-off  could 
not  be  pleaded  under  this  act :  for  this  act  is  general,  and  lias  no  such  provision 
as  tliere  is  in  the  act  of  8,  9  W.  3.  c.  11.  sec.  uh.  viz.  <'  That  the  judgment  .sliall 
"  sta?id  as  security."  And  therefore  if  the  plaintiff' should  now  recover  judgment, 
there  would  be  an  e7id  of  the  bond ;  and  there  would  remain  no  secui-ity  at  all  for 
/«<Mre  payment  of  the  annuity. 

And  he  agreed  with  Mr.  Serjeant  Hevsitt,  that  this  is  a  neta  case 


APPENDIX.  3^^ 

Mr.  Serjennt  Hewitt  insisted,  that  this  act  of  8  G.  2.  c.  24.  differs  materially 
T-om  8,  9  rr.  3.  and  from  4,  5  Ann.  c.  16.  sec.  13.  for  bringing-  in  the  money,  and 
having-  the  bond  discharg-ed.  The  present  act  shvs  "  That  the  pi aintiiV  shall  r«. 
•«  cover  the  sum  truly  and  justly  due,  and  no  more."  And  my  brother  Poole  says, 
♦•  That  after  the  matter  is  passed /n  rem  ju.iicatam,  tlie  p\x\n\\^'  cannot  a/teraa'rds 
"  recover  any  more  upon  the  same  bond."  But  I  an.swer,  tiiattlu-  plainiitf  -would 
be  at  liberty  to  bring  an  action  for  any  further  breach  .-  for  the  present  judgnnent 
(upon  the  set-off)  would  not  be  for  the  penalty,  but  only  for  the  i-u^w"  m//)'  and 
justly  due,  and  no  more. 

Lord  Mansfield — These  clauses  in  8,  9  W.  3.  c.  11.  and  8  G.  2.  c.  24.  arc  ct- 
tremely  henejiclal  to  the  subject. 

Therefore  his  lordship  chose,  he  said,  to  consider  of  it  ;  and  did  not  mean  to 
give  his  opinion  at  present.  Hov.-ever,  by  way  of  breaking  case,  he  entered  into 
an  explication  of  the  acts  ,  which  he  thought'ought  to  bo  considered  all  together, 
us  being  made  in  pari  materia.  So  tliat  stoppage  or  setting-off  must  have  tllfc  skmfe 
ellect,  under  the  8  G.  2.  us  payment  had  uneler  8,  9  W.  3. 

Therefore  he  thought,  (at  present,)  that  it  was  most  beneficial  to  the  sub- 
ject, that  in  the  case  now  before  tlie  co»u-t,  the  set-off *Aow/(/ be  allowed.  But  he  as- 
sured Serjeant  Poo/<',  that  if  they  should  be  of  that  opinion  on  deliberation,  he 
should  not,  as  it  was  a  new  case,  be  caught  by  his  demurrer  ;  for  that  they  would 
give  him  leave  to  withdraw  it,  and  reply. 

Ci'R.  Advis. 

Lord  M.vxsFiELD  now  delivered  the  resolution  of  the  court  ;  viz.  That  they 
were  all  (upon  deliberate  consideration)  unanimously  and  clearly  of  opinion  (as  it 
."Struck  him  before)  that  this  is  a  case  within  8  G.  2.  c.  24.  sec.  4,  5.  Where  mutual 
debts  maybe  set-off,  just  as  much  as  actnai  pay^nent  of  liie  money  might  have  been 
before. 

He  said  he  would  consider  how  tlie  law  stood,  before  the  acts  of  2  G.  2.  c.  22. 
and  8  G.  2.  c.  24.  and  under  the  act  of  8,  9  JF.  3.  c.  11. 

The  act  of  8,  9  W.  3.  c.  11.  is  entitled  ♦'  An  act  for  the  better  preventih^  frivtf- 
"  lous  and  vexatious  suits."  The  last  clause  of  it  is  a  provision  intended  to  itifeeV 
the  case  of  non-performance  of  covenants  and  agreements  secured  b\  bonds  or  in- 
dentures ;  and  which  covenants  or  agi-eements  are  to  be  \yi^rfovn\cd' nt  different 
times,  or  the  monies  paid  by  instalments,  ike. 

Before  that  act,  a  plaintiflcoidd  only  assign  one  breach,  upon  surli'bond  or  ifl- 
dentm-e.  And  if  the  defendant  could  prove  that  the  ivho/c  dcht  wan  paid,  thcrtr 
was  an  end  of  the  matter.  But  if  the  defendant  had  only  \y.C\d  part  of  the  debt,' 
and  not  the  vhole,  then  the  judgment  was  taken  for  the  ii/io/i'  penalty  :  and  tliis 
judgment  for  the  ti'/io/r/)e7ia/r/ stood  as  a  security  for  liu-  rm./u^  of  the  demand" 
which  remained  unpaid.  So  that  the  judgm(-nt  stood  for  the  iiilwle  penalty,  though' 
only^arf  remained  due;  and  the  plaintifl"  was  ijustly  t-ntitlcd  only  to  that,  and  no 
more:  which  often  forced  the  defendant,  in  such  a  case,  into  expensive  suits  iti' 
equity  for  relief. 

To  prevent  which,  the  last  clause  of  this  art  of  8,  9  W.  3.  c.  11.  provides 
"  Tl'.atin  all  actions,  in  any  of  his  mujest\'s  courts  of  record,  mxin  any  bond  or 
"  bonds,  or  on  any  penal  sum,  for  non-i)erformance  of  any  coven.uils  or  agreements 
"  in  any  indenture  deed  or  writing  contained,  tlie  pliiintHVor  plaintiHs  muy  assign 
"  as  many  breaches  as  he  or  they  shall  think  fit  ;  and  the  jury  shall  assess  damagfes 
•'  and  costs  on  so  many  of  them"  as  the  plaintiHshall  prove  to  h.-ivc  been  broken  -.^ 
"  and  the  like  judgment  shall  he  entered  on  such  verdict,  as  had  been  usually  done' 
"  in  such  like  actions."  Then  there  is  a  suitable  provision  forsngt,'-esting  several* 
breaches,  where  the  judgment  passes  by  default,  confession  f>r  on  demurrer.  Then 
the  act  provides,  "  That  if  after  ju<lginenl  and  before  execution  executed,  the' 
"  defendant  shall  pav  into  court  all  the  damages  and  costs  on  the  several  breaches 
"  a-ssigned  and  found,  \x  stay  ff  execution  u\\  the  judgment  shall  be  entered  tipon' 
"  reconl  :  or  if,  byre:i.son  of  any  execution  executed,  the  plaintiff  shall  he  fully  f^fd 
"  and  satisfied  all  such  damages  and  costs,  and  the  charges  of  such  cxectilirtn  ;  then 
"the  body,  lands  or  goods  of  the  defendant  shtill  he  di.srharged  of  su<h  execution  . 
"  which  shall  likf-wise  he  ent<r(  d  upon  record.  Btil  yet,  in  each  ra«i-,  the  J'  •'''■•- 
"  MEVT  shall  remain  as  a  further  senirity,  to  answer  damnge.s  to  Iho  plailttifV  foi* 
"/Kfwre  breaches  ;  upon     which  ih'- plniiitirt' may  linre  a  tfrV^/Arfrti  on  Ihe  judg'- 


36  APPENDIX. 

"  ment.sugg-estin^  ochey  breaches  ;  n-liereupon  tliere  shall  be  the  like  procrcding'  as 
"  was  in  the  action  of  debt  upon  the  bond,  for  assessing-  damati-cs  on  such  breaches ; 
"  and  on  payment  or  satisfaction,  as  before,  of  such/M««rc  damages  costs  and  charo-es 
«  as  aforesaid,  all  further  proceeding  shall  be  again  stayed ';' unii  so  toties  quotics , 
"  and  the  defendant,  his  body  lands  or  goods  shall  be  discharged  out  of  execution. 
f  as  aforesaid." 

A  very  beneficial  remedy,  and  a  very  just  one  to  the  subject,  this  ia.  The  Judg- 
ment is  to  be  forthe  whole petudty,  and  is  to  reviain  as  nfurt/ier sccuriiv ,- ihouf:;h 
EXECUTION  is  to  be  stayed  on  pi^yment  of  the  sum  due,  &c.  So  tliat  ti'ie  pcnaltj) 
is  a  security  for  the  debt  interest  and  costs,  upon  aX\y  future  breach. 

Before  this  statute,  the  actual  PAVMENTof  money  in  discharge  of  the  demand, 
V^as  exactly  upon  the  same  foot,  as  the  set-off  of  a  debt  is  novj  put  upon  ;  and  a 
plea  of  PAVMENTof  a  sum  of  money  sufacient  to  discharge  the  i^jhole  demand  wae 
just  the  same  then,  as  a  set-off  of  a  debt  large  enough  to  balance  the  -ujAo/e "de- 
mand, is  now  .•  that  is  to  say,  it  was  ii  full  ov^n-f r  to  the  plaintiff's  demand  ;  and 
he  could  have  no  judgment  at  all  against  the  defendant. 

But  if  it  had  come  out,  that  there  had  been  a  failure  of />ffj7?7e«f  of  aRv/;art  of 
the  plaintiff 's  just  demand,  the  plaintiff  would  have  been  entitled  to  take  his  Judg^ 
MEN  t  forthe  wAo/e/)e«fir/i'y  ;  (Though  execution  was  to  be  stayed  on  payment 
oj  the  damages  already  incurred  andcojf^  .•)  and  this  judgment  for  the  ■vihole  penalty 
was  to  stand  as  a  security,  to  a.T\s\\'(ti-  future  breaches. 

But  the  payment  here  intended  was  to  be  an  actual  payment.  ¥ov  stoppage,  or 
eetthig-off  debt  against  debt,  was  not  then  equivalent  to  actual  payment  :  but  cross 
actions  must  at  that  time  have  been  brouglit,  forthe  respective  mutual  debts. 

Since  these  two  vei-y  beneficial  acts  of  2  G.  2.  c.  22.  and  8  G.  2.  c.  24.  stoppage,  or 
^e«/w|'-o/"  of  mutual  debts,  is  become  equivalent  to  actual  payinent  :  said  a  balance 
shall  be  struck,  as  in  equity  and  justice  it  ought  to  be. 

At  common  /uto,  before  these  acts,  if  tlie  plaintiff  was  as  much,  or  even  more 
indebted  to  the  defendant  than  the  defendant  was  indebted  to  !iim,  yet  the  defen- 
dant had  no  metiiod  to  strike  a  balance  :  he  could  only  go  into  a  court  of  equity,  for 
doing  what  is  most  clearly  just  and  right  to  be  done.  ' 

The  2  G.  2.  c.  22.  was  made  to  answer  this  just  and  reasonable  end  ;  and  enacts 
generally,  "That  where  there  are  mutual  debts  between  the  parties,  one  debt  may 
*'  be  set  against  the  other."  Upon  which  act  of  2  G.  2.  doubts  about  the  different 
natures  of  debts  have  arisen  ;the  8  G.  2.  c.  24.  was  thereupon  made  :  the  5th  section 
whereof  is  a  general  provision  ivithout  exception.  So  that  the  objections  whick 
iiavebeen  here  made,  on  the  part  of  the  plaintiff,  are  made  by  construction  only. 

It  is  objected,  first,  •'  That  this  is  not  an  action  brought  upon  a  penalty  for  non- 
"  performance  of  an  agreement  or  covenant  contained  in  any  indenture  deed  oc 
**  ivriting.'" 
_  This  is  an  agreement  between  the  parties,  and  an  agrceinent  in  i-riting  :  the  condi- 
tion of  the  bond  is  an  agreement  in  'jjriting ,-  and  people  have  frequently  gone  into 
courts  of  equity  upon  conditions  of  bonds,  c?  being  agi-eements  in  writing,  to  have 
%  specif  c  performance  of  them. 

It  is  said  that  if  the  plaintiff  should  take  his  judgmcjrt  upon  this  act  of  parlia- 
onent,  it  would  no?  he  a.  judgment  for  tiie  penalty,  but  a  judgment  only  f.r  tlie 
sum  due,  and  no  more  ;  and  that  after  the  matter  has  once  -passed  in  rem  judicataitt^ 
the  plaintiff  cannot  afterwards  recover  any  m.ore  upon  this  bond,  wliatevcr  may  be- 
come due  by  future  non-payments  ;  for  that  here  is  «o /Jrw/.S70?:  "  that  the  j'udg- 
"  men  shall  stand  as  a  security  for  future  payvients,""  as  there  was  in  the  act  of 
8,  9  W.3.  c.  11.  made  for  the  better  preventing-  frivolours  and  vexatious  suits. 

The  judgment  is  indeed  by  this  act  of  8  G.  2.  directed  to  be  entered  "  for  no 
"more  than  shall  appear  to  be  justly  and  truly  due  to  the  plaintiil':"  But  it  is 
clearly  within  the  words  and  meaning  o{  the  act,' that  the  penalty  is  to  remain  as  a 
security  against  future  breaches,  in  this  case  of  a  >sef-o/ pleaded,  as  mucli  as  it 
would  have  done  upon  the  act  of  8  9,  W.  3.  c.  11.  \f  payment  \x.xd  been  m^id^ 
agreeably  to  the  directions  therein  contained. 

But  as  this  has  not  been  before  settled,  "  That  a  set-off  may  be  pleaded  in  such 
a  "  case  as  this,  where  the  conditlonis  for  the  pajTnent  of  an  annuity  or  growing  sum.** 
It  -would  be  hard  to  bind  the  plaintiff  down  strictly  to  Jiis  demurrer.  Therefore  my 
Ibrqther  Poole  may  move  to  ivitkdraw  tlie  demurrer,  and  to  reply  in  aproper  manner ; 


APPENDIX.  37 

which  v,\\\  give  the  plaintiff  an  opportunity  of  disputing  the  debt  pleaded  by  way 
of  set-off,  if  he  thinks  proper. 

Which  Mr.  Serj.  Poo/c  moved  accordingly  :  and  the  court  granted  it;  but  added 
^Rt  it  6hould  be  upon  payment  of  costs. 

Stdcey  Ross  Sc    al.  r.  Decy.  M.   1789.  Esp.  Cases,  469, 

TT  was  an  action  for  goods  sold  and  delivered  :  Plea  of  set-off. 
**■     It  appeared  in  evidence,  that   the  plaintiffs  had  entered  into  a  partnership  as 
grocers  ;  and  it  v^'as  agreed  tliat  J^oss  should  keep  the  shop  in  his  own  name  only ; 
under  those  circumstances  he  dealt  with  the  defendant  for  the  partnership  goods, 
for  whicfi  this  action  was  brought. 

The  defendant  had  done  business  for  the  plaintiff  i?o**  on  his  own  account,  and 
not  on  account  of  the  partnersliip,  to  a  greater  amount  llian  the  demand  now  made 
against  him  by  the  partnership,  and  this  he  ofiered  to  set-off. 

It  was  opposed  on  the  ground  of  tlie  demands  accruing  in  different  capacities, 
that  so  it  was  inadmissible. 

Lord  Ken- YON  was  of  opinion,  that  the  set-off  was  good;  his  lordship  said, 
the  plaintiffs  had  subjected  tf.cmselves  to  it,  liy  holding  out  false  colours  to  the 
world,  by  permitting  Jtoss  to  appear  as  tlic  sole  owner  ;  that  it  was  possible  Uie 
defendant  would  not  have  trusted  i?ow  only,  if  he  had  not  considered  the  debt  due 
to  himself  as  a  security  against  a  counter-demand. 

Erskine  observed,  that  the  defendant  h;ui  thereby  a  double  advantage  ;  for,  if  he 
dealt  with  Rosf  as  the  only  partner,  and  had  had  a  demand  against  tlie  partnership 
account,  he  miglit  have  maintained  an  action  against  them  all  ;  yet  here  he  wa.s  per- 
mitted to  consider  Rots  as  tlie  only  partner. 

Lord  Kf.syok  admitted  this  consequence  to  follow  from  the  fiiUary  held  out  to 
the  world  by  such  as  stand  in  the  situation  of  sleeping  partners,  but  allowed  tlie 
set-ofl'to  the  extent  claimed  ;  and  the  defendant  had  a  verdict. 

Jaqueaw  IVithy,  H.  T.  27  Geo.  III.  J.  D.  1787.  1  T.  R.  557. 

1^  ASE  for  money  had  and  received,  money  lent  and  advanced,  &c.  Pica  set-off 
^  340/.  upon  a  judgment  recovered  in  Trinity  \x-rm,  in  the  22d  year,  &.c.  l)y  the 
defendant  against  the  plalnlifl'  in  this  court,  wfilch  Is  still  in  force  and  unsatisfied. 

The  plaintiff  in  his  replication  admitted  the  judgment,  &.c.  but  said  tliat  the 
defendant  in  Mic/iaehnai  term  in  the  23d  year,  &:c.  in  order  to  obtain  s.atlsfuctlon 
of  the  said  judgment,  cliarged  Iilm  in  execution  of  the  said  judgment  in  tlu- cn.st.xly 
of  the  marshal  of  the  MarshaUea,  Sec.  and  kept  .ind  detained  him  in  siicli  custody, 
andin  execution  of  the  said  judgment,  until  the  6tl»  of  February  1783,  wlien  lie 
was  by  and  i-^^ith  the  consent,  privity,  autltority,  ar.d  licence  oftlie  defendant,  and  by  hi.t 
order  and  direction,  released  and  enlarged  frovt-  and  out  of  the  said  custody,  and 
wholly  discharged  from  the  Baid  execuilon  at  the  siutof  the  defendant  of  aj>d  upon 
the  said  judgment. 

Rejotjuier,  That  the  plaintiff  on  the  28th  of  February,  1783,  at  Ids  instance  and 
request,  was  by  and  with  the  consent,  privity,  authority  and  licence  of  the  defen- 
dant, and  by  his  order  and  direction,  released  atid  enlarged  from  and  out  of  the  said 
custody,  i«:.  and  dlscliarged  from  the  said  execution  of  tlie  said  siiil  of  the  (lefen- 
dant  of . ind  upon  the  said  judgment  so  recovered,  &.c.  for  and  in  consldcrMlon  of 
the  plaintHf'9  then  and  there  niakingand delivering  to  the  defendant  a  certain  writ- 
ing obligatory,  bearing  date  the  CSth  of  Febni.ary,  1783,  in  6H1/.  wliii  a  condition 
to  satisfy  thejiidgmcnt  either  by  instalments  or  by  an  aiinuily,  ancl  also  for  and  in 
consideration  of  a  warrant  of  attorney,  executed  in  l!ie  plaintiff  on  the  '.'HI h  of 
February  1783,  given  to  the  defendant  to  confess  judgment  on  the  said  writinR 
obllgatoiy  in  the  court  of  our  lord  the  king  of  the  i)eiKh.  That  after ward>  ami 
within  twentv  <lavsof  the  exerution  of  the  said  writing  obligatory,  .and  warrant 
of  attorney,  (to  v/it,)on  the  18ih  day  of  Miirrh,  1783;  llie  defindanl,  according  to 
tlie  form  of  the  st:itutc,  can.sed  a  m<'morial  to  he  enrolled  In  thancei-v,  of  and  con- 
cerning an  anniiltv  secured  by  a  bond  and  warraiU  of  .attorney  to  confeits  judgment 
ihcreon  in  his  majesty's  court  of  King's  Hcncli,  executed  by  tlir  plaintid,  m  »!•«: 
p^nrd  sum  of  m\l  In  rons'd'-mtion  of  M  ■•  turn  of  :;40/    JOr  p»id   to  ihcpUintifl 


38  APPENDIXr 

by  the  defendant  for  one  annuity  of  50/.  to  be  paid  to  the  defendant  by  the  plaintiff 

during  his  life.  That  the  plaintiff,  after  the  granting  of  the  said  annuity  to  he 
defendant,  nriade  default  of  payment  therein.  And  theieupon  the  defendant,  by 
virtue  of  the  said  warrant  of  attorney  in  Hilary  term,  in  the  26th  year,  £t.c.  signed 
judgment  upon  the  said  writing  obligatory  against  the  plaintiff  in  the  court  of 
Common  Pleas.  And  afterwards  in  the  said  Hilary  term  sued  and  prosecuted  out 
of  the  same  court  a  writ  oi  fieri  facias  y  directed  to  the  sheriff  of  Middlesex,  who 
executed  it.  That  afterwards  in  Easter  term,  in  the  26th  year,  he.  the  plaintiff 
obtained  a  rule  in  the  court  of  Common  Pleas,  to  show  cause  why  the  judgment 
signed  by  the  defendant  against  the  plaintiff,  and  the  writ  of  execution  issued 
thereon  and  executed,  Scc.and  all  proceeilmgs  in  that  cause  subsequent  to  the  said 
judgment,  sho'.dd  not  be  set  aside,  and  the  bond  and  warrant  of  attorney  broiight 
into  court  and  delivered  up  to  the  i)laintiff  to  be  cancelled,  and  the  g.-ods  &c. 
levied  under  the  execution,  restored  to  the  plaintiff,  and  why  the  defendant  should 
not  pay  the  costs  of  all  these  proceedings  ;  which  rule  was  made  absolute  in  the 
same  E^jster  term.  That  the  said  coui't  of  Common  Pleas  so  cideredthe  said  writ- 
ing obligatoi-y  and  warrant  of  attorney  to  be  delivered  up  to  be  cancelled  by  reason 
of  a  inistake,  irformality,  and  irregularity,  in  the  said  ■memorial,  that  is  to  sa),  by 
reason  of  the  said  warrant  of  attorney  being  therein  expressed  to  be  a  warrant  of 
attorney  to  confess  judgment  in  his  majesty's  court  of  King's  Bf  nch,  instead  of  his 
majesty's  court  of  Common  Pleas,  and  by  reason  of  the  consideration  of  the  said 
writing  obligatory  and  warrant  of  attorney  being  expressed  to  be  for  340/.  10*.  paid 
to  the  said  plaintiff,  instead  of  expressing  it  to  be  in  consideration  of  the  said  judg- 
ment for  that  sum. 

To  this  rejoinder  there  was  a  general  demurrer,  and  joinder  In  demurrer. 

Morgan  was  to  have  argued  in  suppoit  of  the  demiu-rer,  but  the  court  desired  to 
hear  the  other  side. 

Wood,  contra,  admitted  as  a  general  position,  that  where  a  person  is  once  taken 
in  execution  and  discharged,  he  cannot  be  sued  again  for  the  same  debt.  But  he 
contended  that  that  was  not  universally  true,  and  that  vmder  the  particular  circum- 
stances of  this  case,  the  debt  due  from  the  plaintiff  to  the  defendant  was  not  ex- 
tinguished. An  execution  against  the  person  of  a  defendant  is  not  in  all  cases  a 
satisfaction  of  a  debt  :  for  if  he  escape  out  of  custody  when  cliarged  in  execution, 
Jt  IS  clear  that  an  action  may  be  maintained  on  the  judgment,  because  it  is  by  the 
defendant's  act  only  that  he  obtains  his  discharge.  The  same  rule  likewise  holds 
if  that  discharge  be  obtained  by  fraud.  Now  in  tliis  case  the  discharge  gi-anted  by 
the  defendant  was  not  voluntary,  but  it  was  on  a  consideration  which  has  failed; 
aiid  therefore  the  dischiu-ge  cannot  operate  as  a  bar,  or  extinguish  the  debt.  This 
IS  like  the  case  where  a  judgment  on  a  simple  contract  is  reversed  by  a  writ  of 
error,  the  sim;5le  contract  still  remains,  and  an  action  may  be  maintained  on  the 
assumpsit.  So  if  an  execution  be  set  aside  for  irregularity,  the  plaintiff  may  sufe  out 
another. 

AsHHURST,  J.  There  must  be  judgment  for  the  plaintiff  in  the  present  case  ; 
I  cannot  pretend  to  sav  how  far  a  court  of  equity  would  interfere  in  this  case  ;  and 
indeed  tlie  defendant  .seems  to  have  some  ground  for  claiming  relief.  But  at  all 
events,  the  discliarge  from  the  execution  is  certainly  a  discharge  at  law.  I  know 
of  only  one  c  ise  where  a  debtor  in  execution,  who  obtains  his  liberty,  may  after- 
wards be  taken  again  for  the  same  debt,  and  that  is  where  he  has  escaped  ;  but  the 
reason  of  that  is  because  he  was  not  legally  out  of  custody.  But  where  a  prisoner 
obtains  his  discliai-ge  ivith  the  consent  of  the  party  who  put  him  in  e-^ecut'wn,  he 
cannot  be  retaken.  In  the  present  case,  the  plaintiff  trusted  to  the  other  security, 
and  therefore  he  cannot  resort  to  the  first   security  again. 

BuLLER,  J.  Tlie  counsel  for  the  defendant  has  relied  only  on  the  equity  of 
the  case  ;  and  that  advantage  has  been  taken  of  a  mere  slip.  It  is  not  material  for 
us  to  consider  whether  a  conscientious  man  w^ould  have  taken  this  advantage  ;  the 
truth  is,  there  is  a  flat  objection  under  an  act  of  parliamcnt(rt)  of  which  the 
plaintiff  is  entitled  to  take  the  benefit.  The  facts  are,  that  the  plaintiff,  being  in 
execution  at  the  suit  of  the  defendant,  was  discharged  by  him  on  giving  a  bond 
and  warrant  of  attorney,  which  security,  at  the  time  it  was  given,  was  good. 
Therefore  the  plaintiff  was  not  guilty  of  any  fraud.  But  the  objection  is,  tliat  the 

(a)  17  Geo.  3.  c.  6. 


APPENDIX.  39 

requisites  of  the  act  not  havin_^  been  complied  with,  the  security  is  void.  That 
howevci-  arose  from  the  neg'lcct  of  tlie  dti'eiulunt  lilniscif,  in  not  cdinplying  \vitJ» 
the  directions  of  the  statute.  If  the  security  were  good  at  ihe  time  of  the  diseharpe, 
the  defendant  cannot  have  recourse  to  the  judgment  again,  because  that  was  waived ; 
and  the  debt  luiving-  been  once  extinguished,  cannot  be  revived  again.  This  is  not. 
a  new  question.  The  case  of  Vigcrs  and  Jlurich,{a)  goes  the  whole  length  o\: 
this  ;  for  it  shows,  that  if  a  defendant  has  brcn  once  discharged  out  of  execution 
upon  terms  which  are  nut  at'icrwards  comi^lied  with,  the  plaintitV  cannot  resort  tc> 
the  judgment  again,  or  cluu'ge  the  defendant's  person  in  execution.  So  lure,  if 
the  detVndant  has  neglected  to  avail  himself  of  the  advantage  of  tlie  security,  it  iit 
his  own  fault,  and  he  must  take  the  consequences. 

Judgment  for  the  plaintlff.(A) 

Percevall  Hutchinson  v,  William  Sturgefi,   T.  T.  li  (J^  \5   Geo.   II.   A.    O. 
1741.  C.  l\]Vitlcs  261. 

[H.  U  Geo.  II.  Rol.  444] 

A  DEBT  on  a  bond  for  8/.  given  by  the  defendant  to  tlie  plalntiffonc  of  the  bcr>  rors 
of  the  virges  of  tlie  King's  household  and  an  officer  and  minister  of  the  Ki  og'a 
Court  of  his  palace  at  Westminster ,-  dated  the  25th  of  July,  1740. 

The  defendant  pleaded  that  the  plaintifi"  was  indebted  to  the  defendant  inj  10/. 
for  work  and  labour,  &c.  in  10/.  for  goods  sold  and  delivered,  8«.c.  and  in  5/.  for 
money  had  and  received,  &c.  amounting  in  the  whole  to  the  sum  of  25/.  wliic  h  ex- 
ceeds the  debt  of  the  plaintitl',  and  wiiich  the  defendant  oH'ered  to  set-oJli  &,c.  ac  cord- 
ing to  the  statutes,  &.c. 

The  plaintilf  prayed  that  the  condition  of  the  bond  might  be  enrolled,  ar  d  then 
demvuTed  to  the  defendant's  plea.  The  condition  of  the  bond  was  for  the  :  .ppear- 
ance  of  5.  Daniel  before  the  judges  of  tiie  King's  Court  of  his  palace  at  West.n-.imter 
at  the  next  Court  of  the  King  of  his  palace  to  he  holden  at  Soiuhiuark  in  tiie  county 
of  Surry  on  Friday  the  25tli  of  July  to  answer  T.  Squier  in  a  plea  of  trespas  j  on  tlic 
case,  to  his  damage  of  99*. 

This  case  was  argued  on  the  7th  of  Februaiy,  1740.  by  Bootle  Serj.  for  t'  ic  plain- 
tiflT,  and  Agar  Serj.  for  the  defendant ;  and  now  the  opinion  of  tlie  court  v  r.is  given 
as  follows,  by 

Willes,  Lord  Chief  Justice.  "  The  question  is  whether  these  debts  ftliich  the 
defendant  sets  forth  in  hi,s  ))lea  can  be  set-oft'  against  tlie  pl-.iintift  's  dema'  nl  There 
are  two  statutes(c)  in  relation  to  this  matter  ;  and  it  will  be  jiroper  to  c  jr.sider  un- 
der which  statute  this  falls,  and  how  the  determinations  have  already  been  in  tJie 
construction  of  tiicm. 

The  words  of  the  first  statute,  which  is  the  2  Geo.  2.  c.  22.  a.  11.  :  ire  "  where 
there  are  mutual  debts  between  tlie  j)laintifl  and  the  defeiuhmt.or  if  i  ilher  jiarty 
sue  or  be  sued  as  executor  or  administrator  where  tiiere  :u-e  mutual  u  elits  between 
the  testator  or  intestate  and  eitiier  party,  one  dt  bt  may  be  set  against  die  othei ,  and 
such  matter  may  be  given  in  evidi  nee  on  the  general  issue  or  ph-adt  d  in  bar  as  llie 
nature  of  the  case  shall  require;  .and  if  intendeil  to  be  given  in  e\  idencc,  notice 
shall  be  given,  &c.  Upon  the  oi  stniction  of  this  statute  several  questions  ajx)si' 
before  the  making  of  the  slat.  8  Geo.  2.  c.  24. 

1st.  Whether  debts  on  simpk-  ronli'act  could  be  sct-olT  in  comn  icn  cases  nguinsL 
a  debt  on  sjuciality  ? 

2'lly.  If  in  common  cases,  wlicther  they  could  whore  an  cxtcu  tr,r  or  administra- 
tor is  |)laintiP  .' 

And  3dly.  Wliether  in  the  case  of  a  bond  the  penalty  was  1  o  be  considered  an 
debt  ?  &c. 

In  Kemvs  v.  J3ftson,{d)  Tr.  f)  Geo.  2  in  B.  C.  it  was  lioldon  i'4  the  rase  of  un  ex. 
eculortliat  simple  coulia' t  debts  ci.nnot  be  .set-off  against «icl  ts  on  specialties;  for 
that  tiicilebt'*  must  be  cf  an  'qual  nrtturc  ;  <itlier\vise  such  a  c  mstruction  might  oc- 
casion adcv.'tst'ivit.  I  should  have  been  of  the  same  opinicii  I  efurc  the  ntat.  K6>o  i. 
but  n  )t  for  tlie  same  rca.son.     For  if  u  blalc  orders  it  to  be    bo,  it  will  justify  llie 

{a)  A  Burr.  2442.  (Ij)  Birch  v.  ^harlaml,  pn.^t.  715.  (c)  S'  u  2'Dnrr.  824 ;  1024,  5; 
1230  i  and  4  Burr    2221.     {J)  8  V<n.  Abr.  561././.  30.  1 


40  APPENDIX. 

executor,  and  it  will  be  no  devastavit  in  him  ;  and  of  this  opiniou  wa^  Lord  Hahu- 
TviCKE  in  the  case  of  Brown  v.  Holyoak,  which  1  shall  mention  by  and  by.  The 
true  rear>on  is  that  this  was  only  substituted  in  the  room  of  an  action,  to  prevent 
circuity  or  a  bill  in  equity.  It  was  therefore  held  that  you  cannot  set-off  a  debt 
barred  by  the  statute  of  limitations,  because  you  cannot  recover  it  by  action.  This 
judg'menl  was  never  reversed.  And  in  tiie  case  of  ^oy  v.  Roberts  in  the  Exchequer 
,"./.  6  Geo. ;'.  tiicre  was  tlie  same  resolution.  But  in  the  case  of  Stevens  v.  Lofton(a) 
M.  6  Geo.  2.  this  court  carried  it  further,  and  held  in  the  case  of  an  action  upon  a 
bond  between  common  persons  a  debt  upon  simple  contract  which  was  pleaded 
Tould  not  be  set-off,  ffoing-  upon  this  reason  that  tliere  oug-Jitto  be  the  same  construc- 
tion on  every  part  of  the  act;  but  in  this  I  think  they  were  mistaken;  for  where 
the  cases  are  diflerent  the  construction  ought  to  be  diifercnt  too.  And  of  this  opi- 
nion were  the  Court  of  King-'s  Bench,  vvlien  it  came  before  them  on  a  writ  of  error,  (6) 
and  would  have  reversed  the  judgment  but  for  another  objection,  the  debt  pleaded 
being  less  than  the  penalty  though  more  than  the  mon»y  due  i)y  the  condition  ;  and 
tills  being  a  case  before  the  stat-  8  Geo.  2.  they  held,  and  I  tlilnk  very  rightly,  that 
at  law  the  penalt}^  niust  be  considered  as  the  debt.  And  in  the  case  of  Broim  v. 
Holjoat,{c)  P.  8  Geo.  2.  B.  Ji.  on  a  writ  of  error  out  of  this  court,  the  coml  of 
King's  Bench  reversed  the  judgment  of  this  coiu-t  which  had  determined  that  a 
debt  on  simple  contract  could  not  be  set-off  against  a  debt  due  for  rent ;  and  I  think 
tliat  the  judgment  was  rightly  reversed  for  the  reasons  I  have  already  mentioned. 
In  tliat  case  Lord  Hardwicke  said  it  would  not  work  a  devastavit,  and  seemed  a 
little  to  doubt  how  it  would  be  in  the  case  of  executors.  But  his  doubt  was  removed 
by  the  statute  8  Geo.  2.  c.  24.  passing-just  at  that  time.  By  that  statute  it  is  enacted 
that  mutual  debts  may  be  set  against  each  other  either  by  being  pleaded  or  given  is 
evidence  on  the  general  issue,  though  such  debts  are  deemed  in  law  to  be  of  a  diffe- 
rent  nature,  unless  in  cases  where  either  of  the  said  delfts  shall  accrue  by  reason  of 
a  penalty  in  the  bond,  &c.  in  which  case  the  debt  intended  to  be  set-oft' shall  be 
pleaded  in  bar,  in  which  plea  it  shall  be  shown  how  much(t/)  is  truly  and  justly  due 
on  either  side  ;  and  in  case  the  plaintiff"  recovers,  judg-ment  shall  be  entered  for  no 
more  tiian  is  truly  and  justly  due  to  the  plaintift' after  one  debt  is  so  set-off  against 
the  other.     This  statute  has  solved  all  the  difficulties  before  mentioned. 

Butas  this  is  not  a  bond  vf\\.\\  the  condition  for  the  payment  of  money,  we  are  all  of 
opinion  that  the  case  Is  not  v/ithin  this  statute,  but  must  stand  on  the  stat.  2  Geo.  2. 
For  we  are  of  opinion  that  the  debts  pleaded  cannot  be  set-off  in  the  present  case, 
tliis  being  a  bail-bond,  and  the  plaintift'not  suing  in  his  own  right  but  in  the  natui'c 
of  a  trustee  for  Sr/uier.  If  this  were  otherwise,  all  bail-bonds  might  be  defeated. 
But  it  might  be  as  well  said  that  when  a  man  sues  as  executor  the  defendant  may 
set-off  a  debt  due  from  the  plaintiff  to  the  defendant  in  his  own  right,(e)  as  that 
the  defendrvnt  can  set-off  in  the  present  case ;  and  yet  that  is  contrary  not  only  to 
common  sense  but  also  to  the  plain  words  of  the  statute.  If  Indeed  this  had  been  a 
bond  to  the  sberiffassignedover  to  the  party  according-  to  the  statute„we  should  have 
thought  otherwise,  and  that  the  penalty  must  be  considered  as  the  debt,  this  not  be- 
ing a  case  within  the  statute  8  Geo.  2.  But  the  bond  here  being  sued  by  the  officer 
himself,  we  a.'e  all  of  opinion  that  the  debt  due  from  the  officer  cannot  be  set-off, 
and  tliat  judgiaent  must  be  for  the  plaintiff. 

(a)  8  Fin.  Al>,\  562.  pi.  31.     (b)  Vid.  Sir  JF.  Kel.  139  :  2  Barnard,  338 ;  and  8  Vht. 

AW.  562,  pL  33.     (c)  Barnes  290  ;  8  Vin.  Abr.  562.pl.  32,  and  35  ;  and  Bull.  N.  P.  179. 

{d)  The  defendant  in  pleading  a  set-off,  to  debt  on  bond,  must  setoutthe  sum  justly 

due  on  the  bond ;  md  that  averment  is  traversalile.  Syvimons  v.  Knox,  3  DurnJ.  & E. 

65.  even  though  laid  under  a  videlicet,  Grhnv:ood\.  Barrit,  6  D  &  E.  460. 

(f )  Nor,  when  an  executor  sues  for  a  cause  of  action  arising  after  the  testator's 
death,  can  the  defendant  set-off  a  debt  due  to  him  from  the  testator.  Shipman  v, 
"Thampson,  T.  11  Sc  12  Geo.  2.  C  B.sup.  103  ;  and  Tegetnieyer  and  another,  executors, 
V.  Lumley,  T.  25  Geo.  3.  B.  R.  The  latter  was  an  action  of  covenant  for  rent,  part 
of  which  became  due  in  the  testator's  lifetime,  and  part  since  his  death.  Tlie  de- 
fendant at  the  trial,  b.'^fore  Lord  Mansfield  at  the  sittings  after  Easter  term  25  Geo. 
3.*set-off  a  debt  due  from  the  testator  to  him,  and  the  plaintiffs  were  nonsuited. 
Erakine xaQ\f:<X  for  a  n.;w  trial,  on  the  groandtliat  this  cotddnotbe  set-off;  and  cited 


APPENDIX.  4J. 

M.vans  V.  Prosser,  E.  T.  29  Geo.  III.  J.  D.  1789.  3  T.  R.  1S6. 

'T'HIS  was  an  action  »ipon  the  case  for  work  and  labour,  cai-e  and  diligence,  as  an 
■*■  aiiorncv,  witli  h.  '  (»mnion  money  counts,  and  tlie  declaration  was  entitled  of 
Hilar^  \.Qvm,2J  Geo.  o.  Pleas,  lirst,  twn  assumpsit;  2(ily,  4th;it  ti\e  pliiintiii^t/^y/c 
an  I  at  the  tirm  of  the  plea  pleaded  was  and  still  is  indehled  to  tlie  defendant  in  a 
larger  sum  tlian  is  due  and  owing  from  him  to  the  plaintiH",  sc.  in  251.  9s.  on  a 
promissory  n,)te  of  the  plaintifi  cU.ted  50th  July,  1787,  made  payable  to  P.  H  Ce^il, 
and  by  him  on  the  same  day  and  year  indorsed  to  the  defendant,  &.c.  and  m  otlicr 
sums,  &c.  Replication  (protesting  that  the  plalntitl'  exhibited  his  bill  against  the 
defendant  on  Tuesday  next  id"ter  the  morrciw  oi  All  SoiiU  in  Michaelmas  term,  iii 
the  2oth  year,  kc.  protestingalso  that  the  indorsement  was  made  to  the  defendant, 
a=id  that  the  several  sums  by  the  plea  supposed  to  be  due  to  the  defendant  accrued 
and  became  due  to  him  after  exhibiting  the  plaintiff's  bill.)  That,  notwitl)stanJing 
tlie  defendant's  plea,  to  wit,  on  Tuesday  next  afior  eight  days  ul'St.  Martin  in  Mi- 
chaehnas  2S  Geo.  3.  the  defendant  brought  an  action  in  tliis  court  a.:^:iiiist  the  plain- 
tiff upon  tiie  Same  note,  in  which  action,  and  after  tlie  defendant's  pleading  in  the 
present  aclion,  to  wit,  on  WeJiiesday  next  afttr  ffteen  days  of  St.  Martin,  in  MicLiei- 
niis,  2^  Geo.  3.  the  plaintiti'paid  the  amount  of  the  note  intocourt,  under  a  rule  of 
court :  with  an  averment  that  the  plaintiff  was  not,  at  the  time  of  the  pleading  in 
this  action,  mdebtcd  to  the  defendant  upon  the  several  causes  or  considerations  in 
liis  plea  mentioned  in  any  sum  xceeding  25/.  13*.  so  by  him  piiid  iut6  couit,  SiC. 
in  that  action. 

To  this  replication  there  was  a  gcncr.al  demurrer,  and  joinder. 

Morgan,  who  was  called  upon  to  suppoit  the  replication,  contended  that  the  de- 
fendant could  not  bring  an  action  on  the  note,  and  ])lc.ad  tiie  same  note  by  wav  of 
set-off:  and  that,  bv  the  plaintiff's  paying  tiie  amount  of  it  into  court  in  that  .action, 
lie  had  done  away  the  defendant's  set-off.  But  the  defendant's  plea  is  also  bad, 
and  may  be  taken  advantage  of  on  the  demurrer  to  the  replication.  For  it  is  not 
stated  that  the  debt  on  the  note  which  is  the  subject  of  l!ie  set-off,  was  due  and  ow- 
ing from  the  plaintiff  to  tlie  defendant  at  tJi^  time  of  exhibiting  the  plaintijfs  hill. 
Its  being  a  debt  at  the  time  of  the  plea  pleaded  is  no  answer  to  the  plaintill's  de- 
mand. If  such  a  plea  could  be  supported,  the  plaintiif  woidd  be  deprived  cf  those 
<-osts  to  which  he  was  entitled  when  he  brought  this  action  ;  and  perhaps  tiie  note 
may  iiave  been  indorsed  to  the  defendant  after  the  action  was  brought  for  the  very 
purpose  of  defeating  it. 

Lane,  contra,  cited.  Brov.m\.  B.iskeri:ille,{a)  to  shew  that  the  defendi.nt  might 
bring  his  action  on  the  note,  notwithstanding  his  plea  of  set-off.  And  in  support 
of  the  plea,  lie  relie<l  on  the  authorities  of  Sullivan  v.  Montagii,(_lj)  and  Reynoldt 

Rvdout  Ass\i:jiee  \.  Bro!igh,Coivp.  133.Shipman  v.  Thompson  (1)  Bull.  N.  P.IHO,  and 
Kilvington  executor  v.  Sterenson,  which  he  read  from  a  note  of  Mr.  Justice  Yates. 
•  Assumpsit  as  executor  for  goods  of  his  testator.  There  were  two  ple.is ;  1st.  Kon- 
assumpsit ;  2dlv.  A  set-off  for  a  debt  due  from  the  testator  to  tlic  defend:.nt.  To 
this  the  plaintiff  demuiTed.  And  Wallace,  in  supjiort  of  the  demurrer,  insisted  tiiat 
the  plea  was  bad,  and  that  the  defendant  could  not  set-olfadrbl  owing  to  him  by 
thetestatorinsatisfartionofthe  present  demand,  as  that  would  be  aUiringtIic  course 
of  distribution,  and  hemiglit  by  that  mean  be  paid  bi.fore  creditors  of  a  superior  na- 
ture.  Mr.  Solicitor-Genernl,  who  was  to  have  argued  on  the  other  side.mcntion'.d  the 
Stat.  2  Geo.  2.  c.  22.  s.  13.  Per  Curiam.  The  plea  is  clearly  bad.  This  is  not  nn  action 
for  g  lids  that  were  in  his  iiand-i  at  tlie  testator's  death,  in  which  case  he  might  set  - 
off;  but  for  goods  he  has  taken  possessionof  since  hi*  lUatli,  in  which  ens.-  to  allow 
the  set-off  wjuld  be  altering  the  course  of  dintribution.  Judgment  for  Ihc  i)l:inili(l." 
tVv-v/itT  showed  cause  against  the  rule;  here  th«- executors  unitobt)llilhc-ir<leni:uu..H: 
and  this  case  differs  from  those  cited.  The  balanr,-  only  ought  to  be  paid.  And  a.s 
to  the  inconvenience  of  altering  the  course  of  administration,  iJie  executors  ha\o 
put  thems<lves  in  this  situation. 

Erihinc,  wlu)  was  going  to  argue  In  support  of  llu-  rule,  was  stopped  liy 

Lord  Mdnfivld,  Ch.   J.  who  s.aid  he  wan  satihlied  on  the  i)oinl,  on  the  authority 

of  the  cascof  A'/'/v/wirtort  V.  S'rfvcHJow. 

Rule  absolute. 

(1)    .?«/).  103.  S.  C. 


(«)  2  Burr.  YU'i.     (b)  D'.ui'l.  lOb. 


42  APPENDIX. 

V.  Beerlin^  ■,{a)  in  whicli  it  was  expresslj' decided  \\\-Ai actio  non  goes,  in  every  case, 
to  the  time  of  pica  pleaded,  not  to  tlie  commencement  of  the  action  And  he  ob- 
served in  answer  to  the  argument,  that  the  note  miijlit  have  been  indorsed  to  tl^e 
defendant  after  the  action  broug-ht ;  that  it  apjjcared  on  tlie  recoiiltluit  the  note  was 
r;iven  in  Jidv,  ITS",  and  on  the  same  day  and  year  indorsee  to  the  defendant  ; 
wliereas  this  action  was  not  broug-httill  Hil.  29  Geo.o.  so  that  in  this  case  the  set- 
off' was  of  a  debt  due  at  the    time  oi'  bringing  the  action. 

The  curt  were  clearly  of  opinion  tiiatthe  replication  was  ill,  on  the  autliority  of 
Brown  and  Basiervitk ;  adding  that,  if  tlie  set-off  were  proved  to  the  jury,  and  the 
defendant  also  succeeded  in  his  action  on  the  note,  the  ]  laintiffin  this  action  might 
bring  an  audita  querela,  or  have  some  other  remedy.  But  they  wished  to  lock  into 
the  cases  cited  in  support  of  the  pie.". 

On  the  next  day  Bii.lek,  J.  said  he  had  locked  into  the  esse  of  j?ceji.?;6W«  v. 
Beerlisig,  and  foimd  tliat  it  could  not  be  supported.  One  question,  which  arose 
there,  was  w^hcther  a  judgment  could  be  pleaded  by  way  of  set-ofr'pending  a  writ  of 
error  ;  wliich  tlie  com't  were  of ('jrinion  might  be  done  :  and  so  far  the  juclgmci)t  was 
right.  On  the  other  point  there  ruled,  namely,  that  a  judgment  recovered  after  the 
action  was  brouglit,  and  before  plea  pleaded,  miglit  be  pleaded  by  way  of  set-oft'; 
perhaps  the  court  did  not  consider  the  strict  law,  so  much  as  the  justice,  of  the 
case.     But  this  point  cannot  be  supported    On  wliich 

Judgment  was  given  for  the  plaintiff'. 

Baskervillew  Brown  ;  et  e  contra.  T.  T.  1  Geo.  III.  2  Burr.  1229. 

BROWN  brought  an  action  against  Baskcrville  upon  two  promissory  notes 
amounting  (both  together)  to  the  sum  of  30/.  The  cause  was  entered  and 
tried  before  Lord  Mamjidd  at  the  sittings  •  and  the  plaintiff  took  a  verdict  for  the 
vhole  of  his  demand. 

BaskervHle  had  also  brouglit  an  action  against  BroTon,  for  11/.  18j.  for  taylor's 
work  done  bv  him  for  Broi-cn  ;  and  this  cause  was  likewise  entered  ;.nd  tried  at  tlie 
very  same  sittings  ;  but  it  liappened  that  the  former  cause  (wherein  Broivn  was 
plaintiff",)  was  first  entered  and  first  tried. 

In  the  latter  cause  (wherein  Baskerville  was  plaintiff",)  the  therein  defendant 
(^Browii)  had  given  notice  of  a  set-off  oi'  so  muck  of  the  before -mentioned  two  pro- 
missory notes,  as  would  suffice  to  answer  BoskerviUe''s  demand  against  h.im  ;  and  he 
was  ready,  at  the  trial,  to  have  done  so,  notwithstanding  his  having  taken  a  verdict 
for  the  whole  30/.  in  the  cause  wlierein  he  was  plaintiff' :  but  Baskerville^s  counsel 
opnosedthis  ;  and  insisted  that  Broz-m  had  c'6'ic//i/)C(/ himself  from  making  this  set- 
oT,  by  having  taken  a  verdict  for  the  wAo/e  of  his  demand  ;  whereas  he  ought  (as 
t  ;ey  insisted",)  to  have  left  out  so  much,  in  taking  his  verdict,  as  was  equal  to  Bask- 
erville's  demand  u])on  him. 

I.o.-d  Mansfield,  at  the  trial,  inclined  ag-alnst  allowing  the  set-off";  but  he 
thought  it  a  matter  tliat  deserved  consideration. 

It  was  accordingly  brouglit  before  the  court,  for  their  consideration,  in  the  form 

(a)  Reynolds  t.  Beerling.  M.  25.  G.3.  B.  i?. 

Assumpsit.  Plea,  set-off"  on  promises,  and  also  on  a  judgment  recovered  by  defend- 
ant agauist  the  pi nintiff"  after  the  action  brought  and  before  plea  pleaded.  Replica- 
tion, error  pending  on  that  judgment.  To  this  there  was  a  general  demurrer  and 
joinder. 

Shfpherd,  for  the  demurrer,  insisted  tliat  the  replication  was  no  answer  to  the 
defendant's  plea  ;  that  the  circumstance  of  the  w'rit  of  error  bcingpcndingwas  no 
bar  to  the  defendant's  settingoll  the  judgment.  And  In  support  of  the  plea  he  cited 
Su/livm  v.  3Iont''gu. 

Lane,  contra,  said  that  as  the  writ  of  error  was  a  supersedeas  to  an  execution,  it 
ought  to  be  so  to  every  other  mode  of  obtaining  the  eff'ect  of  the  judgment.  And 
contended  tliat  tlic  plea  itselfcould  not  be  su],>ported,  because  it  was  rot  only  contra- 
I'Vto  the  settled  mode  of  pleading,  but  also  contrary  to  justice,  for  the  plaintiff* 
might  be  thus  deprived  of  the  costs  of  the  action  to  which  he  was  entitled.  And  as 
1 1  Sullivan  v.  Montagu,  the  principal  question  was,  whether  the  judge  could  certify 
af'cr  tlie  cause  was  over.     But 

The  court  said,  on  the  authority  of  Sullivan  v,  Montagu,  that  the  pica  "V^as  good  j 
and  that  the  replication  was  no  answer  to  it. 


APPENDIX.  43 

of  a  motion  made  on  the  pnrt  of  tlie  defendant,  Bro'.vn,  for  a  rule  upon  Bashenille, 
fae  plaintitt",  to  show  cause  why  tlie  verdici  (which  h,.d  been  found  for  BaskcrviiU) 
should  not  be  set  aside  ;  and  wh}'  tlie  defendant,  Brovjii,  should  not  have  the  costs 
of  a  nonsuit. 

Mr.  .Yurfon  and  Mr.  llifw,  on  behalf  of  the  plaintiff,  Baskerv'dle,  now  shewed 
cause  ag-ainsi  this  rule.  And,  besides  urging-  what  they  liad  insisted  upon  at  the 
trial,  they  added  further,  That  tlie  statute  only  sa\->i  '•  that  the  defendant  ma,'  set- 
"  otf  the  debt  due  to  him  from  the  plaintili  ;"  but  does  not  compel  him  to  do  so  : 
and  here  the  defendant,  Bro'ivn,  had  actually  made  his  election  '*  not  to  Jo  it,"  by 
taking  a  verdict  f  )r  his  :i>/io/e  demand  in  the  cause  wherein  he  was  pl./uitifi.  And 
they  insisted  lliat  the  nature  of  the  debt  is  changed,  and  the  former  debt  txtin^\Lh- 
eJ  by  the  verdict ;  so  that  it  cannot  be  set  oft^  in  an  action  tried  ijter  tluit  \e.ditt 
had  been  given. 

T)  this,  it  was  answered  by  Mr.  Morton  and  Mr.  Stowe  (in  support  of  the  rule), 
that  the  debt  remains  unchanged  in  its  nature,  and  unextinguished,  notwithstanding 
the  verdict.  And  it  miglit  liaie  been  still  set-off,  they  si'.iil,  in  the  present  action. 
Without  any  inco.ivenience  :  for  i^  Brown  should  attempt  to  take  out  execution  for 
tlie  Mihols,  in  the  otlier  action  wherein  he  was  plaintifl",  after  a  set-off  in  this  actii)n, 
either  the  court  would  set  the  matter  right,  (even  with  costs,)  or  Baskcrville  might 
have  redress  by  an  audita  fpurelu.  But  Brown  was  obliged,  they  said,  to  take  his 
vertllct  for  the  w/io/s  of  his  demand  :  for  he  could  not  be  sure  that  Bnsktrvilk 
would  try  his  cause  at  all  :  and  then  Brovn  would  have  entirely  iust  this  sum  of 
11.'.  18j.  Brown  did  all  he  could  to  come  at  a  fair  balance  :  he  could  do  no  moi-e 
then  plead  it,  or  give  notice  to  set  it  off,  as  it  stood  at  the  time  of  the  ])lea  ]ileaded. 
The.  fault  was  in  Baskerville.  He  ought  to  have  set  ofihis  demand  upon  Broii-n  of 
11/.  13.J.  against  Broivn''s  demand  upon  him  of  30/.  And  then  com]>lcte  justice  had 
been  done  easily  and  at  once.  He  oug/it  not  to  have  brought  his  action  against 
Broiiin  at  all.  Clk.  advis. 

Lord  Mansfield  now  delivered  the  resolution  of  the  court. 
The  meaning  of  the  act  of  p:a-liament,  he  said,  was,  that  in  all  cases  of  mutual 
debts,  the  less  sum  should  be  deducted  out  of  the  greater,  if  the  defndant  desires  it. 
But  Brown  could  not  compel  Baskervi'le  to  set-oil  liis  less  demand   upon  Brown, 
ag.xinst  Browds  greater  demand  upon  him  :   nor  co'.iid    Brown  ]\:<\v  s:d"ely  taki-n  his 
verdict  fir  less  tlian  his  whole  demand.     Yet  Baskerville  himself  might  have  done 
this  without   prejudice,  and  with  perfect  safety  :   and  he  ought  to  have  done  it. — 
But  he  declined  doing  it  ;  and  at  the  same  time  brings  his  action  against  Brown,  for 
what  he  might,  without  prejudice,  have  set  o(i' against  Brown^s  demantl  upon  him. 
Therefore  it  was  litigious  and  vexatious  in  him  not  to  do  it,  when  he  might  safe- 
ly and  easily  have  done  it ;  but  chose,  instead  of  it,  to  commence  an  action  against 
Brown^ 

B  )th  actions  stood  together  for  tri.d  :  but  it  happened  that  the  cause  of  Brown 
V.  Baikervillc  stood  first.  Brown  took  his  verdict  for  the  whole  demand  upon  the 
tvv)  notes;  there  being  no  plea  nor  notice  of  anysetolfin  tJiis  cause  wherein 
Brown  was  plaintiff. 

Then  came  on  BasZ-erville's  cause,  in  which  he  was  plainlitV,  and  Brown  the  de- 
fendant ;  in  which  cause.  Brown  had  given  notice  to  set-off  so  much  as  was  equal 
to  B'lskeroillc's  demand  upon  him.  Tliis  he  would  have  done  :  but  it  was  opposed  i 
and  the  objection  seemed  specious. 

Bat  we  .ai-e  all  clearly  of  ojiinion,  upon  full  consideration,  "  that  the  debts  might 
"  be  setofVone  again.st'the  other  in  this  latter  cause,  notwithstaiuling  Bro^vnWv.w- 
"  ing  taken  a  verdict  in  the  former  for  his  wliole  demand."  For  if  at  tiie  time  if 
tjie  action  brought,  the  defendant  may  setoff  one  debt  .igainst  the  other,  or  phad 
(if  alarger  sum  be  due  from  the  plaintifl"  to  him,  tlian  from  him  to  the  plaintifl, ) 
in  bar  of  the  plaintiff's  action  ;  Brown  had  a  riglit  in  the  cause  \s  herein  he  w:.-* 
defendant,  to  give  this  notice  of  a  set-off,  at  the  time  when  he  gave  it.  Ami  //.;*- 
krville  might,  in  the  cause  wherein  h<-  was  defendant,  iia\e  set  otl  su'h  part  of  the 
brger  sum  ilue  from  him  to  the  [(laintiff  Brown,  as  was  eriMal  to  the  <lebl  due  to 
him  fnun  the  pliintiff,  if  he  had  tli ought  proper.  And  lirown*  notice  to^.t  off 
against  Basierville's  dem  md,  told  him,  lh:it  Brrr.vn  was  nah  to  .trite  a  halarer 
between  tlie  mutual  dcl)t3,  and  to  he  content  with  the  difference  l)ctw<-on  them  ;  an4 
it  specilitd  the  natmc  oi'  Brown'v  d\:mand  upon  him,  as  the  act  rcquiiCK, 


44:  APPENDIX, 

Thus  it  stood  before  the  verdict :  tlie  debt  due  to  Brmm  was  a  mutual  debt  ; 
and  notice  was  g'lven  of  it,  and  upon  what  account  it  becaiue  due,  and  that  \\  was 
intended  to  be  insisted  on.  And  a/io- the  verdict,  it  still  kemaiised  a  vuUual 
debt,  as  it  did  before.  The  verdict  did  not  annihilate  or  exting'uish  the  debt ;  nor 
change  the  natui-e  of  it,  or  the  rule  of  law  :  it  only  amounted  to  conclusive  evi- 
dence of  it.  So  that  Brown  had  tlie  same  right  to  set  it  oh'  after  tlie  veidict,  as  he 
had  before  the  verdict. 

Wc  are  of  opinion,  this  right  to  make  the  set-olF still  remained  in  Brown,  both 
within  the  words,  and  reason,  and  i?2tent  of  the  act  of  parliament  :  and  that  the  debt 
was  neither  extinguished,  nor  its  nattire  changed. 

Baskcrville  was  tlie  only  person  in  fault :  and  he  ought  not  to  ha^e  brought  his 
action. 

Brown  was  right  all  along  :  he  could  not  have  taken  his  verdict  for  less  than  he 
did,  with  safety.  He  may  now  remit  so  much  of  the  sum  he  has  recovered,  as  will 
bring  the  mutual  debts  to  a  just  balance  :  and  this  he  ortght  to  do. 

But  it  would  be  strange,  if  the  mei'e  accident  of  the  piiorlty  of  tial  should,  by 
his  cause  happening  to  stand  first  in  the  paper,  preclude  him  from  taking  the 
bcneht  of  the  act,  according  to  his  notice  rightly  and  truly  given  at  the  time  when 
it  was  given. 

Per  Cur.  unanimously.  Verdict  set  aside  ;  and  the  defendant  to  have  costs  of 
nonsuit  :  and  Brown  to  remit  so  much  of  his  damages  recovered  in  the  other  action,, 
as  exceed  the  balance  of  the  mutual  debts. 

Symmons  v.  Knox^  II.  T.  29  Geo.  III.  3  T.  R.  65.  J.  D.  1789. 

TXEBT  on  bond  in  11619/.  13.?.  U.  dated  the  14th  July,  1784.  The  defendant 
■^^^  (after  praying  oj.er  of  the  bond  and  of  the  condition,  which  was  that  the  bond 
should  be  voicl  on  i-iyment  of  5089/.  lis.  8d.  with  lawful  interest,  on  the  25tli  of 
March  then  next)  pleaded  aa  follows  :  that  at  the  time  of  exhibiting  the  bill  of  the 
^aid  John  there  was  jtistlti  and 'truly  due  and  owing  to  the  said  John,  on  the  condition 
of  the  said  writing  obligatory,  'pjr  principal- and  interest,  the  sum  of  5809/.  11*.  8d. 
and  na  more,  to  wit,  at  V/estminstcr  vSorcssaA  in  the  county  aforesaid  ;  and  that  the 
said  John  now  is,  and  on  the  day  of  exhibiting  the  bill  of  the  said  yohn  was  in- 
debted to  the  said  IVilliam  in  more  money  than  is  remaining  due  to  the  said  John 
by  virtue  of  the  said  writing  obligatory  ;  and  concluded  with  a  set-ofi'  in  the  com- 
mon form.  The  plaintift'replied,  that  at  the  time  of  exhibiting  the  bill  of  the  said 
John  there  was  andjei  is  juslty  and  truly  due  and  owi?ig  to  the  said  John  froin  the 
laid  William,  upon  av.d  by  virtue  of  the  said  writing  obligatory  anfi  the  condition 
thereof,  for  principal  and  interest,  a  larger  sum  of  ononey  than  the  said  sum  of 
5809/.  lis.  8i.  in  the  said  plea  mentioned,  to  wit,  the  sum  of  6930/.  3s.  9d.  ;  con- 
cluding to  the  country. 

To  this  replication  the  defendant  demurred  :  and  showed  for  cause  that  the  plain- 
tiff" in  and  by  his  rejjlication  attempted  to  put  in  issue  a  matter  wiiolly  Immaterial, 
and  therein  traversed  a  fact,  whereon  no  certain  or  m.aterlal  issue  could  be  taken  ; 
und  hatli  not  in  and  by  his  replication  traversed,  or  denied,  or  confessed,  the  only 
fact  in  the  plea  whereon  a  certain  or  proper  issue  could  be  taken  ;  and  because  the 
replication  was  in  various  other  respects  defective,  informal,  &.c. 

Baldwin,  \n  support  of  the  demurrer.  This  question  arises  on  the  8  Geo.  3. 
c.  24.  s.  5.  which  gives  the  pleaof  set-oft' where  tlie  demand  on  either  side  accrues 
by  bond  ;  and  which  directs  that  judgment  shall  be  entered  for  no  more  than  shall 
appear  to  be  due  to  the  plaintiff  after  one  debt  is  set  against  the  other  The  ma- 
terial issue,  therefore,  to  be  tried  is,  wliether  the  plaintifl  's  demand  on  tlie  defend- 
ant exceeds  that  which  the  defendant  has  on  him  :  and  it  is  immaterial  to  take  issue 
on  the  exact  sum  due  from  the  defendant  to  the  plaintiff.  For  if  the  parties  were  to 
g-o  to  trial  on  such  an  issue,  and  the  plaintiff  proved  that  onh'  one  shilling  more  was 
due  to  him,  the  defendant  would  be  deprived  of  the  benefit  of  the  statute,  even 
though  his  demand  exceeded  that  of  the  plaintiff.  And  no  inconvenience  can  arise 
from"  this  practice,  because  the  act  directs  that  judgment  shall  only  be  entered 
up  for  so  much  as  is  really  and  justly  due. 

Dampier  cojitra.  The  statute  expressly  requires  that  the  sum  which  is  justly 
and  truly  due  shall  be  pleaded  in  bar,  in  which  plea  shall  be  shown  how  much  is 


APPENDIX.  45 

truly  and  justly  due  on  either  side.  If  tJien  it  be  necessai'v  to  &ver  that  something'  ig 
due  on  lae  bo.ul,  the  particiJars  of  tluit  averment  are  nccessai-y.  And  tlic  meanint- 
of  the  statute  is  that,  in  case  Ih.e  defendant  sets  oHa  bond  debt,  the  phiinlitl  rr.aV 
knjw  tne  amount  of  the  defendant's  claim  ;  or  that,  in  case  tlie  defendant  sits  off 
to  a  debt  due  to  the  nlaintiif  arising-  on  a  bond,  lie  may  know  how  much  tie  de- 
fendant admits.  If  tlie  defendant  were  not  to  set  foith  the  true  sum,  the  plaintiff 
would  go  to  trial  ig^norant  of  what  was  to  be  proved  by  the  defendant,  which  was 
the  very  tiling  against  which  the  statute  meant  to  provide.  Then  if  this  be  a 
matei'iai  averment,  it  is  traversable  ;  for  if  the  plaintiif  were  not  to  traverse  it  in 
his  replication,  he  would  be  taken  to  have  admitted  it.  And  it  is  so  matciial,  that, 
unless  the  defendant  avers  wliat  is  truly  and  justly  due,  he  is  not  entitled  under  tlie 
statute  10  set  o.f  at  all.  But  whatever  may  be  the  gener.al  construction  of  tiiis  sta- 
tute, the  particidar  manner  of  pleading  this  pica  has  made  the  aveinu-nt  materi;;], 
and  consequently  traversable.  Th(»  plea  states  that  the  defendant  was  indebted  to 
the  plainiirl,  on  the  bond,  in  5S091.  lis.  8J.  and  no  more,  without  laying- it  under 
a  viJdicet ;  in  consecjuencc  of  which  it  became  necessary  to  deny  it  in  the  replica- 
tion, otherwise  the  plaintin'  would  have  been  bound  by  tliat  precise  sum.  In 
Diirston  \.  Tut'ian{a),  where  the  declaration  stated  tliat,  in  consideration  that  the 
plaintUf  would  buy  of  the  defendant  45  sheep  for  54/.  1L\  6(/.  the  defendant  un- 
dertook and  promised  that  they  were  s'Aind,  the  plaintiii  proved  the  (dice  to  be 
54/.  12i,  6./.  Buller,  J.  held  the  variance  to  be  fatal,  because  the  sum  was  not  laid 
under  a  vi.lt/icet  ,■  and  non-suited  the  plaintiii'.  The  defendant  in  this  case  lias  :ilso 
added  the  words  "  and  no  more,"  which  the  statute  does  not  requiia  ,  but  which 
make  the  traverse  the  more  necessary. 

Lord  K.EN- YON,  Ch.  J.— 1  own  I  form  an  opinion  on  this  subject  with  great 
diffidence.  This  is  an  action  brought  on  a  bond,  in  which  case  the  siatiite  says 
that,  if  the  defendant  wishes  to  set-offa  cross  demand  agninst  the  plaintiii,  he  must 
first  state  in  his  plea  what  is  really  due  on  the  bond  ;  the  defendant  then  ir.  his 
case,  being  furnished  with  the  meaiis  of  ascertalng  the  extent  of  the  demand  upon 
the  bond,  states  that  such  a  sum  only  is  due  ;  and  having  thus  complied  with  the 
requisition  of  the  statute,  sets  off"  a  cross  demand.  And  the  cpiestion  is,  whether 
the  plaintiff  is  bound  to  admit  that  that  is  the  extent  of  his  demand.  Now  if  he 
does  not  deny  it  in  his  rephcation,  he  admits  it  :  it  therefore  became  necessary  for 
the  plaintiff  to  traverse  it  ;  for,  if  the  pla;ntifl'  were  to  go  to  trial  only  on  the  issue, 
whether  his  dem.-nd  did  or  did  not  exceed  the  defendant's  great  injustice  might  be 
done.  And  it  seems  to  me  that  there  is  reason  in  requiring  that  the  exact  sum 
should  be  pleaded,  because  the  pvu-posc  of  i)leading  is  to  reduce  the  matter  to  a 
point.  Here,  too,  the  sum  is  not  pleaded  under  a  ?v /e//ce< .-  and  it  hrs  been  leng 
settledthat  where  any  thing  is  hiid  under  a  -vi leliat,  the  party  is  not  cmuludc<l  hy 
it  ;  but  he  is,  where  there  is  no  vicklicet.  It  would  therefore  be  very  luird  on  this 
plaintiff  if  he  were  bound  by  the  sum,  which  the  defendant  has  stated  not  under  a 
iv\/cV/cf?,  without  having  an  ojjportunity  of  traversing  it.  ,   .  . 

AsiiHURST.J.— The're  is  a  manifest  distinction  between  this  sti.tute  and  ihat  of 
tlie2Geo  2  c  22.  For  this  act  expressK  rerfiircs  that  the  defendant  shall  «<  t 
forth  the  precise  sum  which  is  due  on  the  b:)-i<l,  before  he  can  he  peiniitti  d  to  set 
off-  his  demand.  And  theref.n-e  we  are  prcchuh-.l  by  the  statute  from  consulenng 
this  on  the  same  footing  with  simple  contract  (hbt.s.  The  form  of  pleading  un.lcr 
a  videlicet,  where  the  partv  d<.es  not  mean  to  be  concluded  by  the  sun.  state<l.  sl.owi 
that,  where  it  is  not  so  pleaded,  he  is  bounri  by  the  precise  sum  phr.dcd.  Now  here 
the  defendant  plead.-d  that  aceitain  sum  was  due  to  the  phontdl  on  the  bond  n,,<f 
;,,  more,   which  would  have  concluded  the  plaintiH,  iJ  he  hud  not  traxcrsed  itm 

•"^Sri^(.).    If  the   two  statutes   ^  .Geo.   ..j,^.^^^^C>....c.^A^ 


(a)    Taunton  Sfi.  Au.  17H8.  cor.  Bnllrr.  J. 

\l,)  Mr.  Justice  Butler  was  Billim;  toiUic  Lord  Chancellor. 


-6  '  APfENDlX, 

eltlier  the  plainfiflT's  or  the  defendant's  demand  accrues  by  reason  of  any  pcnaltv-, 
the  debt  intended  to  be  set-off  shall  be  pleaded  in  bar,  in  which  plcashall  be  sliow'u 
how  mucii  is  justly  and  truly  due  on  either  side.  So  that  under  this  act  the  de- 
fendant cannot  g'ive  a  notice  of  set-off  with  the  g-encral  issue  :  but  he  is  required  to 
plead  it  in  bai",  in  which  plea  he  must  state  what  is  really  due  on  the  bor.d.  And 
as  far  as  my  experience  goes,  the  plea  in  this  case  is  warranted  by  the  usual  form 
of  plcadiuj^  :  it  has  not  been  usual  to  jilead  that  a  large  sum  of  money,  to  ii-it,  so 
much  is  due,  but  that  a  specific  mm  is  due  and  no  more.  And  this  mode  is  certainly 
consonant  to  the  8  Geo.  2.  c.  24.  'i'hen.asthe  defendant  set  fortli  what  was  really 
due  without  a  vidclictt,  the  plaintlfi  would  be  taken  to  have  admitted  it,  ii  he  had 
not  traversed  it  in  his  replication. 

Demurrer  overrided. 
But  as  Bald'xin  suggested  tliat  it  had  not  been  the  practice  to  traverse  this  aver- 
ment in  the    replication,  tlie  court  gave  the  defendant  leave  to  amend  on  paying 
the  costs. 

liankeij  and  others^  jissi,^necs  of  Jofni  Ls*  Benjamin    Vaughan^  v.  Smith  and 
ot.hers,  E.  29  Geo.  III.  A.  D.  1789.  B.  R.  in  A'otefi  3  T.  R.  507. 

1"^  O  this  action  upon  the  case  for  goods  sold  and  delivered  by  the  bankrupts  the  de- 
ilndants  pleaded  the  general  issue,  and  gave  notice  of  set-ofi"applic;.ble  to  the 
bill  of  exchange  iiereafler  mentioned.  At  the  trial  at  the  sittings  aht:r  Jlic/iachnas 
term  1788,  at  Guildhall  before  Lord  Kenyan,  the  jury  gave  a  verdict  for  the  plaintihs, 
da  n ages  o20^.  16*.  subject  to  t!ie  oj)ini(m  of  this  court  on  the  following  case  : — 
On  tiie  26tli  o?  yuly  last  a  commission  of  bankrupt  issued  against  tlie  Vaughans,  who 
on  ihe  29th  of  the  same  month  were  declared  bankrupts,  yolui  Faiighan  committed 
an  .act  of  bankruptcy  on  tlie  22d,  and  Benjamin  Vaitghan  on  the  23d  af  ^/ulv.  1  he 
plaiiitiiTs  01!  the  5th  ui'  August  were  duly  chosen  assignees,  &c.  On  the  3d  oi'yjilj  the 
Lankjrupts,  w!io  were  sugar-refiners,  sold  the  defendants  sugar  and  molasses  to  the 
amount  of  452/.  2*.  8i.  and  on  the  21st  of  the  same  month  sold  other  sugars  to  them 
to  the  amount  of  68/.  135.4:/.  making-  together  520/.  16j.  for  which  this  action  was 
brought.  O.ie  William  Broadhurst,  on  the  6th  cS  yune,  1788,  drew  a  bill  of  exchange 
on  the  bankrupts  for  600/.  payable  to  his  order  two  months  after  date  for  value  deli- 
veredto  him  in  raw"  sugar  ;  whicli  bill  was  duly  accepted  by  the  bankrupts,  arid  in- 
d  >rsed  by  Broadhurst,  and  delivered  by  him  to  Towgood  &  Co.  who  on  the  2d  of 
^ul]'  la.st,  and  after  the  bill  was  accepted  and  indorsed,  discounted  it  wiih  tl)e  de- 
fendants, and  delivered  tlie  same  to  them.  'Ihe  defendants  on  the  5lh  oi'  August  last 
proved  imder  Vauglians  commission,  791.  4*.  as  the  balance  due  to  them  on  tiie  bill 
of  exchange,  after  deducting  520/.  16.?.  On  the  10th  oi  September,  1788,  one  of  the  de- 
fendants, Francis  Ke')nble,  was  examined  licfore  the  commissioners  named  in  tliecom- 
inissicm  against  the  ban!cruj)ts,wheu  he  deposed,That  he,  together  witii  yos-Kemble, 
Smith,  and  Travers,\\\e  other  defendants,  carried  on  the  trade  and  business  of  gro- 
cers ;  that  on  the  2d  oi  yuly  last,  W.  Toivgood  a])plied  to  liim  to  discount  the  bill  in 
question  ;  that  he  1 1 ad  before  that  time  heard  that  Vaughans''  iiouse  was  in  difficul- 
ties, but  he  knew  that  B.  Vaughan  was  a  partner  with  y.  Vaughan,  and  he  thought 
him  a  good  man  ;  that  W.  Towgood  said  there  had  been  rumours  of  Vanghans^  sto])- 
ping,  and  that  as  tJie  house  of  him  ("this  examinantj  vias  engaged  in  the  sugar  trade 
they  could  buy  goo  Is  to  cover  the  bill ;  that  he  said  he  did  not  care  what  rumours  tliere 
were,  as, he  believed  the  house  of  y.  Vaughan  &  Co.  to  be  perfectly  safe,  and  that 
they  only  wanted  time  ;  that  at  the  time  he  toot  the  bill  he  vieatit  to  buy  sugars  to  cover 
the  bill ;  that  accordingly'  some  sugars  and  molasses  were  bought  on  the  next  day  ;  and 
that  betv.'cen  that  time  and  the  22d  Oi  yuly,  sugars  and  molasses  to  the  amount  of 
520/.  16j.  \vere  bought  by  tiieir  (this  examinant's)  house  of  the  bankrupts  ;  that  he 
had  never  discounted  a  bill  for  TV.  Toivgood  before,  and  that  he  knew  that  Toivgood''s 
father  Avas  a  banker.  The  defendant,  yostph  Kemble,  was  also  examined  befoix'  the 
commissioners,  who  deposed  that  he  was  the  person  who  bought  the  abovcmen- 
tioned  sugars  of  the  banla-upts,  and  that  at  the  time  he  boug'ht  the  same  he  did 
not  inform  tliem  of  their  house  being  in  possession  of  tlie  bill  ;  that  onereason  cfhis 
going  to  the  house  o/V'aughan  &•  Co.  to  purchase  the  sugars  and  molasses  loas  their  bc- 
ins;  in  possession  of  the  bill  ;  and  that  aL  the  time  when  the  bill  was  discounted  for 
Tuivgood  he  did  not  indorse  the  same,  but  by  a  memorandum  in  writing  agreed  to 
indorse  it  when  he  should  be  thereunto  required  ;  tl^.at  he  accordingly  indorsed 
ita  few  d^ys  afterwards  and  after  he  had  heard  that  Vaughaii's  house  had  stoj)pe<l 
payment ;  that  the  reason  why  the  bill  was  not  indorsed  was  that  if  Vaughan  &  Co. 
had  stood  tlieii*  groiuid  it  might  be  presented  for  pa^-ment  without  the  indorse- 


APPENDIX.  47 

ment  of  To^^good,  Danvers,  and  Co.  (the  house  in  wliich  TVI/ilam  TmvgooJ is  a  part- 
ner,) iis  JV  'i'oi:gooU  tlni  no',  chuosc  th:it  tlicir  iii.inc.s  slioulti  appear. 

/iunstl,  t'ji-tljc  plain  ills,  contended  tliat,  abstrucudh  from  every  circumstance  <'.f 
fraud,  ilie  set-o,'  could  not  be  maintained,  because  tliei'e  were  neiilier  nuilu:Ll  debts 
or  mutual  credits  between  the  p;a-ties  wiiliin  the  5  Cat.  2.  c  oO.(rt)  i'rtsc^t^s  case  shows 
th:it  tiiere  was  no  mutuaLiebt,  because  the  bill  was  not  due  till  utter  tJie  bankr\i|)tc\ . 
Neiilier  was  liiere  any  vitttiiai  creUit ;  for  at  the  time  of  selliu}^-  the  goods  the  bank- 
rupts  did  iiot  know  that  tliis  bill  was  in  the  hands  of  the  detenUar.ts.  They,  in 
taking:  tlie  bill,  g-ave  no  credit  to  the  bankrupts  ;  tJiey  took  it  nie.cly  to  acconinio- 
date  Toixsgooj,  and  Co.     But 

The  c  lurt  were  clearly  of  opinion  that  tlicre  was  mutual  credit 

Lord  Ke.vvox,  Cii.  J.  said — The  mutual  credit,  was  constituted  by  taking- the  bill 
on  the  one  hand,  and  :,ell<ng'the  sui^ars  on  the  otiier.  Though  if  tlie  bill  bud  conic 
into  the  defendants'  hands  ex  post  facto,  as  after  the  action(^>)  was  brought,  it  would 
have  been  otherwise. 

Bllleh,  J. — In  order  to  constitute  mutual  ci-edit,  it  is  not  ncccs.san- that  the 
parties  mean  particularly  to  trust  each  other  in  tliat  transaction.  For  if  a  "bill  ofj  cx- 
chant^e,  which  is  acceiited,  be  sent  out  into  the  world,  credit  is  given  to  the  ac- 
ceptor by  every  person  who  t;ikes  the  bill  :  now  that  constituted  liic  iredit  on  one 
side  in  tliis  case  ;  then,  on  the  other,  credit  was  given  to  the  defendants  Ly  ths 
bfxuiiaapis  for  tlie  goods. 

Tlie  case  was  also  argued  on  the  ground  nf fraud :  but  the  court,  not  considering' 
the  transaction  to  be  fraudulent,  gave  judgment  for  the  dcieiuiants.  But  on  a  sub- 
sequent day  in  Easter  term  they  observed  that  there  were  circumstances  to  be  left 
to  the  jury,  on  which  they  ought  to  exerci.se  their  judgment,  whether  or  not  iKiud 
to  the  defendants  could  be  imputed  ;  and  lor  that  rca.sonthey  ordered  it  to  be  sent 
down  to  anotl'.e;-  tr  a!. 

Holrojd,  for  tfic  defendants. 

Hancock  and  others,  Asdgnecs  of  Edcnsor,  a  Eunkru/it^  v.  Kutvjislc  and 
others,  M.  T.  30  Geo.  III.  A.  D.  1789.     3  T.  R.  435. 

THIS  was  an  action  on  a  bill  of  exchange;  and,  the  plaintifTs  having  proved 
ilieir  case,  the  only  cjuestion  was  whether  the  delendants  were  eniiikd  to  » 
set-oti  aiising  iiom  an  agTcenient,  made  in  March,  irtib,  between  the  defend:. nts 
of  the  one  pai*t,  and  t!ie  bankiupt  of  the  otlier,  by  which,  (after  reciting  that  ii  loi;a 
had  been  sustained  by  the  defendants  in  consequence  of  the  ]hu  chase  of  sonii  cot- 
Ion  by  the  bankrupt  as  their  broker,  for  rcinibuisiiig  which  they  made  a  claim  cu 
him,)  in  order  to  put  an  end  to  all  controvcisy  concerning  U,  it  was  agn-etl  titut  the 
loss,  though  exceeding  1900/.  should  be  fixed  at  that  sum,  ar.d  no  iiun  ,•  and  that  in 
payment  or  sati.sfHction  of  that  sum  the  bai»kru|)t  .•-.lioiild,  from  time  to  time,  within 
the  s|)ace  of  four  years  rccomniend  parcels  <>f  cotton,  not  e.xreeding  l.JO  b.  j,s  at. 
one  time,  to  the  defendants  for  their  purchase,  and  that  liie  deleiulanis  bhoulil  pur- 
cliase  them,  paying  for  them  in  notes  at  three  month's  date.  j{i:d  the  laiJrupi  un- 
dertook that  the  clear  profits  on  such  sales  should  in  the  count  tffi,ur  years  be  sujjicieat 
to  discharge  the  IdOOl.  but  if  the  same  should  not  be  paid  la'thiii  that  lime,  then  tie 
bankrupt  agree  I  intniecliiUely  rfer  the  expiration  (f  the  fair  years,  in  Case  he  should  be 
then  living,  to  pa.  them  tut  dij/ercnce.  And  if  tlic  purchases  should  occasion  ..  K  .-ii* 
to  the  defendants,  the  bi.nkruiit  undertook  to  make  gixid  biich  loss.  Lord  A'en.on, 
before  whom  the  cause  was  tried,  being  of  opinion  that  the  dcli.ndai.ls  were  not 
entitled  to  set-off',  the  plainlilfs  obtaineil  a  verdict. 

On  a  firmer  day  a  rule  was  obtained  to  .sliow  cause  wliv  n  new  tri:l  should  not 
be  granted  ;  against  which 

Erskine  and  Marryat  were  now  to  liave  sliewn  cau.^-e  :   Ihit 

Law  .ind  S.  Ilu^wond,  in  «unp«irt  of  the  rule  were  <ieslr«d  to  In'Kin.  The  .nct-oM 


may  be  allowed,  bccau-se  these  were  iicpiidated  damages,  by  the  j.givemeni  i  ;.i.d 
theVefire  this  is  not  like  the  rase  of  lhv:Ut  v    '  '      "  )     \\  lu-n  the  pajtv  he- 

came  a  bankrupt,    lie  was  incapable  of  pcrfon;  :  :-:iit  ;  and  then  h  iij,lit 

of  action   to  the  amount  of  1900/.  attached,     'i ■  aiiie   a  debt  which  ll,« 

defendants  miglit  have  proved  under  the  comniishion,  llic  parties  Laving  pixvioiuly 

(a)  Atk.  ::30.     (A)  Vid.  Evanf  v.  Prgjser,  ante  m.     (c)  CoM'fi.  36. 


48  APPENDIX. 

agreed  as  to  inc  iji.artnia  of  s:<.tisfac1  ion  to  be  paid  by  tbe  bankrupt  to  the  defen- 
iLiiits  ;  and  if  tbcy  mig-ht  liave  proved  the  d(.bt  under  the  commiasion,  they  may 
also  set  it  olf  in  this  action  brougiit  by  the  assignees. 

Lord  Kenyon,  Cii.  J. — If  this  deed  had  never  been  entered  into,  the  claim 
whicli  the  defendants  had  on  the  bankrupt  could  not  have  been  set-oh  in  this  ac- 
tion, because  it  rested  merely  in  damag'es  ;  it  arose  from  tlie  misconduct  of  the 
bankrupt,  and  mig-ht  have  bcecn  settled  in  an  action.  But  by  this  deed  the  dama- 
ges are  liquidated,  and  the  parties  ag-reed  on  certain  things  to  be  done  in  the  course 
of  foiu-  years,  as  the  means  of  making  a  recompense  to  the  defendants  to  the  amount 
of  tliat  sum.  If  a  certain  sum  uf  money  had  been  payable  at  :dl  events,  by  instal- 
ments, and  one  oi"the  payments  had  beeome  due  before  the  bankruptcj',  ihe  wlu>la 
mig'ht  !iave  been  proved  under  the  commission.  But  it  is  clear  th-.t  the  bani<rupt 
was  not  discharg'od  by  his  banlu'uptcy  f"ora  the  operation  of  tliis  deed  ;  for  when 
lie  obtains  his  certificate,  he  may  be  enabled  to  perform  the  stipulations  contained 
in  it.  Then  if  lie  were  not  discharged  from  his  covenants  by  his  certihcate,  this 
debt  could  not  be  proved  under  the  commission,  nor  can  it  be  set-ofi  ;  for  it  had 
no  existence  as  a  debt  at  the  time  of  the  bankruptcy.  The  distinction  has  been 
well  settled  in  a  variety  of  cases,  as  in  those  of  Ex  parte  Groine(a)  and  Ex  parte 
Winckcster,{b)  that  if  tlie  demand  be  payable  at  all  events,  though  at  a  future  da)-, 
it  may  be  proved  under  the  commission  :  but  wiiere  it  depends  on  a  contingency, 
whctlier  it  will  be  paid  or  not,  it  cannot  be  proved,  unless  it  be  secin-ed  by  a  pe- 
nalty which  \s  forfeited  at  lavs  :  in  which  case  the  court  will  take  hold  of  the  legal 
rig'ht  to  give  the  party  a  remedy  under  the  commission.  But  in  this  case  there 
was  no  legal  demand  at  the  time  of  the  bankruptcy. 

Rule  discharged. 

Eijall,  Knt,  and  oi/irr/i,  assignees  of  Harvest^  a  banlcrujit.^  v.  Larkin^  B.  i?, 
M.  T.  20  Geo.  I!.  A.  D.  1746.   1   IVils.  155. 

ACTION  on  assumpsit,  that  the  defendant  was  indebted  to  Willican  Harvest 
and  yonathan  Stevens  deceased,  whom  the  said  William  Harvest  survived,  in 
20/.  for  g^ods  sold  and  delivered  by  the  said  WilUaTn  Harvest  and  Stevens  in  his  life- 
time, and  before  the  said  Willidnn  Harvest  became  a  bankrupt,  to  the  sa.\dJFilliavi. 
Larkin  quantinn  valebant  for  otiier  gootls,  and  an  insimul  computasset  with  Harvest 
and  Stevens  in  his  life-time,  whereupon  defendant  was  found  in  arrear  13/.  5s.  6cL 
and  being  so  found  in  arrear  promised  payment,  and  concludes  that  the  defendant 
hatlt  not  paid  the  said  Harvest  and  Stevens  in  the  life -time  of  the  said  Stevens,  and 
before  the  said  Harvest  became  a  bankrupt,  or  to  the  said  Stevens  in  his  life -time 
since  the  said  Harvest  became  a  bankrupt,  or  to  the  said  plaintifis,  the  assignees, 
.since  the  death  of  the  said  Stevens,  to  the  damage  of  the  said  assignees  of  20/. 

Defendant  pleads  non  assumpsit,  and  thereupon  issue  is  joined  ;  and  further  the 
defendant  by  leave  of  the  court  says,  that  the  said  assignees  ought  not  to  have  or 
maintain  their  said  action  against  him  the  said  defendant,  because  he  the  said  defen- 
dant says  that  the  said  William-  Harvest  before  be  became  a  bankrupt,  that  is  to 
say,  on  the  21st  day  o^  April,  1740,  at  Westminster,  in  the  county  aforesaid,  b3'his  cer- 
»  tain  writing  obligatory  called  a  bond,  sealed  with  the  seal  of  the  said  William  Har- 
vest, and  shown  to  the  court  of  the  said  Lord  the  King-nowhere,  the  date  wliereof 
is  the  day  ar.d  year  last  mentioned,  acknowledged  himself  to  be  held  and  flrmly 
bound  to  the  said  William  Larkin  in  100/.  of  lawful  money  of  Great  Britain,  to  be 
])aid  to  the  said  William.  Larkin,  when  he  should  be  thereunto  required  ;  and  the 
said  William  Larkin  in  fact  saith,  that  there  is  now  due  and  owing  tohim  the  said 
Williain  Larkin  froin  the  said  William.  Harvest,  upon  account  of  the  said  writing 
obligatory,  for  principal  and  interest  the  sum  of  64/.  of  lawf  d  money  of.Great- 
jSritain,  to  wit,  at  Westminster  aforesaid  in  tlie  county  aforesaid,  which  said  sum  of 
64/.  bv  the  said  TVillia7n  Harvest  owing  as  aforesaid,  exceeds  the  money  from  the 
said  William.  Larkin  due  to  the  said  assignees  of  the  said  William  Harvest  as  afore- 
said, to  wit,  the  sum  of  13/.  5s.  and  6:1.  by  occasion  of  the  promises  mentioned  in 
the  said  declaration,  namely  at  Westminster  aforesaid,  and  out  of  which  said  sum  of 
64/.  he  the  said  William,  Larkin  is  willing"  and  offers  to  pay  the  said  assignees  the 
whole  of  the  said  money  due  to  them  as  assignees  aforesaid,  by  reason  of  the  pre- 

(«)  1  Atk.  US,  (b)  1  Atk.  116. 


APTEXDIX.  49 

mlses  according  to  the  form  of  the  statute  in  such  cnse  made  and  protided  ;  and 
this  he  is  ready  to  verify  ,  wiicrefore  lie  prays  judg-mcut  it  Uie  said  assij;iKcs  ouglit 
to  have  or  maintain  tlieir  said  action  thereupon  against  him,  Sec.  To  this  the  plam- 
tiff  demurred  g-enerally,  and  the  defendant  joined  in  demurrer. 

This  case  was  arg-ued  by  Serjeant  BootU  for  the  pluiniil.s,  and  by  Mr.  Laivson 
for  the  defendant.  For  the  plaintiffs  it  was  insisted,  that  the  act  of  parlianniit  lor 
setting'-ofl'one  debt  ag-ainst  another  did  not  extend  to  assignees  under  a  commission 
of  b  iHicriipt,  and  that  in  tlie  present  case  there  were  not  mutual  debts,  for  where- 
cvcr  there  are  mutual  debts  there  must  be  mutuij  remedies,  and  the  defendant 
could  have  no  action  on  his  bond  against  the  jilaintills  ;  and  of  this  opiuivn  was  tlie 
court,  and  gave  judgment  for  the  plaintiiis. 

Sinith  and  others,  Assignees  of  Lc-ms  and  Potter  v.  Ilcdson,  H.  T.  Z\  Geo. 
III.  J.  D.  1791.  4  T.  R.  211. 

A  SSUMPSIT  for  goods  sold  and  delivered  to  the  defendant  by  the  bankrupts,  he- 
fore,  and  ais')  by  the  assignees  since,  tJie  bankruptcy.     Pleas  non  assumpnit,  and 
a  tender  of  131/.  7s.  67.  which  the   plaintitis  tonk   out   of  court     'i  here  was  idso 
a  set-oft".     At  the  trial  h\  Guildhall  before  Lord  Kenyon,  a  verdict  was  foiuid   for 
the  plaintift's,  subject  to  the  opinion  of  this  court  on  the  following  case. 

In  August,  1787,  Lewis  and  Potter  sold  goods  to  tlie  defendant  to  the  amount  of 
42/.  and  on  the  4th  of  Marcli,  1/88,  they  drew  a  bill  on  him  at  two  months  for 
442/.  payable  to  their  own  order,  although  at  that  time  he  was  indebted  to  them 
in  42/.  oidy,  which  bill  the  defendant  accepted.  Le^uis  arid  Potter  miAe  the  follow- 
ing entry  in  their  books  :  "  4th  of  March,  1788,  receiveel  I'rom  yames  Uodson  an 
acceptance  due  7th  May,  442/.  to  bills  and  notes  ;  to  pro\ide  400/."  On  the  2()tl» 
April  several  bills  were  refused  payment  by  Leviis  and  Potter,  some  r.f  which  \\i-re 
presented  by  bankers  on  behalf  of  the  indorsees.  Onjthe  28th  April,  1788,  the  de- 
fondant  went  to  the  house  of  Levis  and  Potter,  and  bought  goods  to  the  amoimt 
of  531/.  7s.  6./.  which  were  sent  to  him  v.ith  a  bill  of  parcels  the  same  day  ;  iJie 
goods  were  sold  to  the  defendant  at  six  months  credit.  On  the  29th  of  April,  1788, 
Le^ois  and  Potter  committed  acts  of  bankruptcy.  On  the  9th  of  May  the  con>- 
mission  issued,  and  tiiey  were  duly  dechu'ed  b:inki'upts,  and  tiie  plaintifs  (  hosen 
assignees  of  their  estate  and  efliects.  The  bill  for  4-1-2/.  drawn  by  the  bankrupts, 
and  accepted  by  the  defendant,  became  due  tlie  7th  of  May,  1788  :  the  diflnilunt 
did  not  pay  it  on  that  day,  but  in  Scptc^nber  following  jjuid  to  Gibson  and  yolir:so>i, 
the  holders  thereof,  200/.  on  account  of  the  bill  ;  and  in  October  f  illowing,  before 
the  six  months  credit  upon  the  goods  was  expired,  he  paid  the  residue  witli  intcrcst- 
The  jury  thought  the  bankrupts  gave  an  undue  preference  to  the  defendant  in  the 
sale  ;  and  gave  a  verdict  for  the  plaintilVs,  damages  400/.  The  questions  for  the 
opinion  of  the  Court  are  ;  1st.  Whether  the  plaintifis  can  support  this  action  for 
the  price  of  the  goods  ?  2dly.  If  they  can  support  this  action,  whether  the  defen- 
dant cannot  set-ofl"  against  it  the  money  paid  by  him  on  the  above-mentioned  bill 
for  442/. 

Eussell,  for  the  plaintiffs,  was  desired  by  the  Court  to  confine  himself  to  the 
second  point,  as  they  entertained  no  doubt  upon  the  first.  As  to  which  he  con- 
tended that  though  the  sale  were  good  to  charge  the  defendant  in  this  action,  yet 
he  w:is  not  entitled  to  support  his  set-oH  under  the  5  Ceo.  2.  c.  30.  *.  28.  (n) 
The  words  which  will  be  relied  on  are  mutual  credit  :  But  they  were  l)y  no  nieana 
intended  to  be  used  in  so  extensive  a  sense  as  the  one  now  put  on  lluni  l)V  the  de- 
fendant. The  giving  of  crfi//f  is  merely  giving  a  future  day  of  ))a\ment  fiir  a  pre- 
existing debt  ;  and  to  entitle  a  defendant  to  set  it  oiV,  it  must  exist  prr\ioiis  to  the 
act  of  bankruptcy.     As  where  goods  are   sold  to  be  paid  for  at  a  future  day,  the 

(a)  Which  enacts  that  where  "  there  hath  been  mutual  credit  given  hv  the  bnnk- 
"  rapt  and  any  otluT  person,  or  mutual  i/e/»f*  bet  w«cm  the  bankrupt  nm\  any  otlier 
"  pcrs  m,  at  any  time  before  such  person  became  bankrupt,  the  mnunissioners.  he. 
"  shall  state  tiie  account  between  them,  anil  one  debt  may  be  set  iij,'ain«t  anollieri 
"  and  wliat  shall  a!>')ear  to  be  due  on  either  siih- on  the  halaiirc  ..f  snrh  rrrDtii.t,  and 
"  on  setting  tuck  drhtu  tij^iintt  oiit  another,  and  no  more,  bhali  be  claimed  or  piud  orv 
'*  cit!»er  side  respectively." 

C 


50  APPENDIX. 

sendee  becomes  a  debtor  fi)r  the  value  upon  the  delivery,  though  payment  cannot 
be  exacted  from  lilm  till  tlie  day  arrives  :  In  the  meantime  the  vendor  is  his  credi- 
tor to  that  amount ;  and  in  tliat  sense  only  is  the  word  credit  to  be  understood  in 
the  act.  This  ap]5ears  further  from  the  subsequent  words  of  tlie  statute  ;  for  the 
commissioners  are  directed  to  state  the  account  between  the  parties,  and  claim  or  pay 
onlv  so  much  as  shall  appear  due  on  the  balance  of  such  account.  In  order  therefore 
for'a  party  to  set-off  any  demand,  it  must  be  such  as  may  be  made  an  item  in  the 
account,  and  either  certain  or  reducible  to  a  cei-tainty  at  the  time  of  the  act  of 
bankruptcy  committed.  The  ;u-t  itself  says,  that  the  balance  of  tlie  account  is  to 
be  made  appear  "  on  setting-  stick  debts  against  one  another  ;"  which  plainly  shew  s 
that  nothing-  more  was  meant  by  the  word  creuits  tlu.n  such  debts  as  were  p:iyable 
at  a  futvu'e  day.  Then  how  does  the  statute  apply  to  this  case  ?  There  w:'s  no 
debt  existing  between  the  bankrupts  and  the  defendant  at  the  time  of  the  bank- 
ruptcy ;  nor  was  it  certain  there  ever  w-ould  be  one  ;  i'or  in  cascoftiie  deftiidant's 
bankruptcy  or  refusal  to  pay,  the  holder  miglit  have  proceeded  against  the  estate  of 
the  drawers  and  recovered  the  amount  ;  and  that  perhaps  after  the  defendant's  ac- 
ceptance had  been  admitted  as  an  item  of  account  between  him  and  the  bankrupts. 
And  at  all  events  no  debt  could  arise  till  after  payment  by  the  defendant,  which 
was  long  after  the  bankruptcy,  and  therefore  coidd  not  be  sct-ofi  ;  for  at  that  time 
the  bill  was  outstanding  in  tl-e  hands  of  third  persons,  and  was  therefore  the  sub- 
iect  of  mutual  credit,  if  at  all,  between  them  and  the  binkiupts.  But  in  Groome^s 
case(a)  Lord  Hard-vcicke  was  cleai-ly  of  opinion  that  a  debt  arising  on  a  contingency 
after  the  bankruptcy,  could  not  be  set-oil'.  And  it  has  been  dctci  mined  that  though 
a  note  indorsed  after  an  act  of  bankruptcy  may  be  proved  imder  a  commission  against 
the  drawer,  (Zi)  yet  it  cannot  be  set -oil' against  an  action  by  his  assignees. (c)  The 
cases  Ex  parte  I)eeze,(d)  Ex  parte  Frescot,(e)  and  French,  assignee  of  Cox  v.  i^e«7!,(y) 
were  all  of  them  cases  wliere  the  bankruyjts  were  actually  indebted  to  the  de- 
fend:mts,  bi?fore  the  bankruptcies,  in  the  sums  wliich  they  set-off  against  the  de- 
mands of  the  assignees  ;  which  differs  them  matcriall}-  from  the  present.  But  even 
supposing  this  were  such  a  demand  as  could  in  a  fair  transaction  be  set-ofi  in  a 
court  of  law  under  the  statute,  yet  it  cannot  avail  the  defendant  in  this  case,  where 
the  whole  is  vitiated  by  fiaud.  It  therefoi-e  becomes  material  to  examine  what 
part  of  the  transaction  may  be  substantiated,  and  wdiat  is  void.  There  is  no  fraud 
in  the  mere  act  of  sale  ;  and  the  defendant  must  be  bound  by  that  so  far  as  he  made 
himself  liable  for  the  amount  of  the  goods  :  that  wo\dd  have  been  the  case  had  the 
sale  been  made  to  a  person  who  was  no  creditor  of  the  bankrupt's.  But  tlie  objec- 
tion arises  to  the  fraudulent  use  now  attempted  to  be  made  of  the  sale.  No  party 
is  entitled  to  set-off  a  demand  against  the  assignees  of  a  bankrupt,  for  which  he 
could  not  have  maintained  an  action,  or  wliich  he  could  not  have  proved  under  a 
commission.  Now  if  tlie  defendant  could  not  have  done  either  in  the  present  in- 
§tance, before  the  bankruptcy,  he  shaii  not  be  permitted  to  recover  the  amount  in- 
directly in  this  manner;  for  that  would  be  to  permit  him  to  avail  himself  of  his 
own  fraud. 

Gibbs,  for  the  defendant,  insisted,  first,  that  if  the  whole  were  to  be  consideretl 
as  a  bona  fide  ti'ansaction,  the  defendant  was  entitled  to  set  ofi  the  sum  paid  under 
his  acceptance  ;  and,  2dly.  That  the  finding-  of  the  jviry,  as  to  tlie  undue  pi-eference, 
could  not  vary  the  case  in  favour  of  the  plaintiffs  in  this  action.  The  first  question 
depends  on  the  stat.  5  Geo.  2.  c.  30.  s.  28 ;  the  true  construction  of  which  is, 
that  wherever  there  is  mutual  credit  between  the  bankrupt  and  another  person  be- 
fore the  bankruptcy,  the  debts  may  be  set-ofi' against  each  other,  although  one  of 
them  may  accrue  after  the  bankruptcy,  and  although  that  one  debt  could  not  foim 
an  item  of  an  account,  so  as  to  enalile  the  bankrupt  and  sucii  other  person  to  strike 
a  balance.  The  plaintiff's  argument,  that  nothing  c;in  be  set  off  under  the  statute, 
but  that  which  may  form  an  item  of  an  account  at  the  time  of  the  bankruptcy, 
and  the  pajrment  of  which  is  only  postponed  for  a  time,  directly  militates  ag-ainst 
the  decision  oi French  v.  Fenn.  If  that  case  be  law,  the  construction  now  attempted 
to  be  put  on  this  statute  by  the  plaintiff's  counsel  cannot  prevail.     In  that  case  Fenn 

{a)     1  Atk.  119.  ih)     Ex  parte  Thomas,  1  Atk.  73. 

(c)     Marsh  v.  Chambers,  2  Str.  1234.      (d)     1  Atk.  228. 

(c)    lb.  230.  (/)     Tr.  23  Geo.  3.  Co.  M.  L.  2d  ed. 


APPENDIX.  51 

owed  nothing' to  Cox  previous  to  the  bankrujrtcy  .  so  here  Lc^is  and  Potter  owed 
Holsonnoilwwj:;  previous  to  tlieir  bankruptcy;  but  Fenn  had  bctii  intrust;  d  bv  Cox 
wiih  that,  upon  which  he  probably  would  become  ins  debtor,  nitniily  the  side  uf 
the  jewels,  in  which  Cox  was  interested  one-tliird  pait  ;  so  Lcviia  and  Potter  had 
been  entrusted  by  HoUaon  widi  that  ui)()n  which  tliey  probably  would  become  his 
debtors,  ss.  with  his  acceptance  for  442/.  he  having  eiiects  to  the  amount  of  42/. 
only  ;  There,  Fain,  upon  the  credit  of  the  jewels  intrusted  to  him,  trusted  Cax 
on  another  accoimt  ;  so  here,  Lev:h  imd  Potter,  on  tlie  credit  of  the  acceptance  in- 
trusted to  thorn,  trusted  Hoison  on  anotlier  account,  namely,  for  the  goods  in 
question  ; — There,  after  the  bankruptcy  of  Cox,  Fain  received  a  sum  of  monc}'  upon 
the  sale  of  tiie  jewels  intrusted  to  him,  which  becanu'  due  to  Cox's  estate  ;  so 
here,  after  the  bankruptcy,  HoJson  paid  a  sum  of  money  upon  the  acceptance  in- 
trusted to  them,  f  )r  whicli  he  has  a  claim  upon  tlieir  estate.  In  that  case  the  court 
allowed  the  set-olV;  and  yet  at  the  time  of  Cox's  bankruptcy  no  balance  coiddhavc 
been  struck  between  the  parties,  because  the  defendant's  claim  arose  from  tlie 
produce  of  the  pearls  afterwards.  What  that])roduce  would  be  could  not  be  known 
at  the  time  of  the  bankruptcy,  and  consequently  covdd  not  then  form  an  item  in  an 
account  between  the  parties.  Secondly.  The  finding-  of  the  jury,  as  to  the  undue 
preference,  is  either  nugatory  as  to  the  plaintifls,  or  it  operates  as  a  ground  of  non- 
suit. The  plaintiifs  have  an  option  either  to  atlirm  or  disaHirm  the  conti-act ;  if  the 
former,  the  defendant  is  entitled  to  set-olf  his  demand  ;  if  tlie  latter,  though  the 
plaintiffs  might  recover  in  trover,  they  cannot  maintain  this  action.  The  jury  found 
that  there  was  a  fraud  in  the  sale  :  the  plaintiffs  cannot  tlierefore  contend  that  the 
fraud  is  confined  to  the  use  made  of  the  sale.  If  the  defendant  had  obtained  his 
defence  by  fraud,  it  would  not  have  availed  :  but  it  does  not  follow  that,  because 
there  was  a  fraud  in  the  sale  oftlte  goods,  from  tiie  bankrupt  to  the  defendant, 
the  latter  shall  not  set-off  a  cross-demand  against  the  price  of  the  goods.  The  fraud 
(if  any)  was  in  the  sale  of  the  gootls  ;  and  tlie  effect,  which  it  lias,  is  this, (a) 
tliat  the  bankrupt  conveyed  no  property  in  the  goods  to  tiie  defendant,  and  that  it 
was  a  naked  delivery  ;  if  so,  the  plaintids  sliould  bring  trover,  not  assumj^sit. 

Russetl  in  reply.  Wltli  respect  to  the  case  of  French  v.  Fenn,  whicli  seems  to  have 
been  principally  relied  on  by  the  other  side,  there  are  two  very  material  distinctions 
between  that  and  the  present  ease  ;  there  did  exist  mutual  debts  between  the  par- 
ties in  that  case,  though  the  precise  amount  was  not  actually  ascertained  at  the 
time  of  the  bankruptcy  ;  but  still  it  was  capable  of  being  reduced  to  a  certainty  at 
any  time  by  the  sale  of  tlie  jewels.  And  if  Fenn  had  become  a  bankrupt  instead  of 
Cox,  it  cannot  be  denied  buttiiat  Cox  miglit  have  come  in  under  /•'t'»;i'«  comini.ssion 
for  a  third  of  the  value  of  those  jewels.  .'\.gain,  in  that  case  the  jewels  were  in  the 
hands  of  the  party  between  whom  and  tlic  bankrupt  the  account  w:ls  to  be  settled 
and  tlie  mutual  debts  and  credits  allowed  :  whereas  here  the  acceptance  was  in 
the  hands  of  tlilrd  persons  at  the  time  of  the  bankruptcy,  without  any  certainty 
that  they  w  juld  ever  be  discharged  by  the  defendant.  Cur.  adv.  vuit. 

Lord  Ke  vvov,  Ch.  J.  n  iw  lelivered  the  o|)inion  of  tiie  court.  His  Lordship, 
after  stating  tiie  facts,  said,  W'*  have  considered  tliis  case,  aiul  are  of  opinion  that 
the  defends  it  li.as  nude  a  sulHcient  defence  against  the  action  in  lis  present 
form,  and  consequently  tiiat  a  judgment  of  Ho/ij«/f  must  be  entered.  It  Is  expressly 
stated  in  tiie  case  that  the  goods  in  question  were  delivered  by  tiie  bankrupts  to 
the  defendant  with  a  view  to  defraud  the  rest  of  their  creditors  ;  and  tlierefore  uii 
aetion  miglit  have  been  framed  to  disifHrm  tlie  contract,  wliicli  was  thus  tiiiclured 
with  fraud  ;  for  if  the  assignees  liad  brought  an  action  of  trover,  tliey  might  have 
recovered  the  value  of  the  goods.  'Pie  statute  5  C?co.  2.  f- 30.  *.  28.  enactn  tiiat 
where  it  shall  appear  to  the  commissioners  that  thire  liatii  bi-eii  mutual  credit  be- 
tween the  bankrupt  and  any  otiier  person,  or  mutual  debts  between  the  bankrupt 
and  any  other  person,  before  the  l)ankruptcv,  the  roiiimiKsioiu  is  or  the  assignees 
shall  state  the  account  between  them,  and  one  delit  may  he  set  iigiiiii.ii  anotiicr  ; 
and  the  balance  only  of  sucli  accounts  sliall  he  claimed  and  paid  on  elllur  wide  j  in 
the  m  )st  extensive  W)rdi.  Andtherefirc  we  are  perfectly  sutisfied  with  thirciiHcs 
ex  parte   Di.ze,{b)  and    French   v    Fenn.      Uut   if  an   action    of  trover  lud    been 

(a)  Co'A  B   L.  Cd  cd  (A)  1  Atk.  228. 


52  APPENDIX, 

broug-ht,  instead  of  assumpsit,  this  case  would  have  difFered  materially  from  those 
tw)  ;  because  in  both  those  cases  the  g-oods  had  g-ot  into  the  hands  of  the  respec- 
tive parties  prior  to  the  bankruptcy,  and  without  any  view  of  defrauding-  the  rest 
of  the  creditors  ;  and  therefore,  accordinj^  to  the  justice  of  tb.ose  cases,  whether 
tr.)ver  or  assumpsit  liad  been  broug-ht,  the  whole  account  ou^ht  to  have  been  set- 
tled in  the  wiy  in  which  it  was,  because  the  situation  of  tlic  parties  was  not  al- 
tered with  a  view  to  the  bankruptcy  :  but  here  it  was  ;  and  if  trover  had  been 
brous^ht,  the  defendant  would  have  had  no  defence,  and  those  cases  would  not  have 
availed  him.  B  it  this  is  an  action  on  the  contract  for  tnc  goods  sold  by  the  bank- 
rupt. And  alth'.)Ug-h  the  assig-nees  may  either  afhrm  or  disaffirm  tiie  contract  of  the 
bankrupt,  vet  if  they  do  affi.-m  it,  they  must  act  consistently  throughout  ;  tliey  can- 
not, as  has' often  been  observed  in  cases  of  this  kind,  blow  hot  and  cold  ;  and  as 
the  assis^nees  in  this  case  treated  this  transaction  as  a  contract  of  sale,  it  must  be 
pursued' tlu'oug-h  all  its  consequences  ;  one  of  whicli  is,  tb.at  the  party  buying'  may 
set  up  the  same  defence  to  an  action  b'-out^'-lit  by  the  assignees,  which  he  mig-ht 
have  used  ag-aiustthe  bankrupt  himself;  and  consequently  may  set-ofi  another  debt 
•wh'ch  was  owniG^  from  the  bankrupt  to  him.  This  doctrine  is  fully  recognised  in 
Hitckinsv.  Campbell, {a)  and  in  A7';|'  v.  Leith.{b)  Now  here  the  assig-nces,  by 
brin'/mg'  this  action  on  the  contract,  recognised  the  act  of  the  banki'upt,  and  must 
be  bound  by  the  transaction  in  the  same  manner  as  the  bankrupt  himself  would 
have  been  ;  and  if  he  had  brought  the  action,  the  whole  account  must  have  been 
settled,  and  the  defendant  would  have  had  a  right  to  set-ott'the  amount  of  the  bill. 
Therefjve,  on  the  distinction  between  the  actions  of  trover  and  assumpsit,  we  are 
all  of  opinion  that  a  judgement  of  nonsuit  must  be  entered. 

Judg-mcnt  of  nonsuit. 

Atkinson  and  others,  Jssi,q,'nee3  of  Hodgci,  a  Bankruht  v.  Elliot  and  another^ 
M.  r.  38  Geo.  III.  A.  D.  1797.     7  2'.  R.  378. 


O 


jN  the  trial  of  this  action  of  assumpsit  for  money  had  and  received,  the  follow- 
ing- case  was  reserved  for  the  ojjinion  of  this  coui't. 
On  the  2d  May,  1796,  the  defendants  sold  to  Hodges,  the  bankrupt,  300  barrels  of 
tar  for  430/.  at  6  months'  credit,  and  on  the  3d  of  the  same  month  tiiey  drew  a  bill 
on  him  at  six  months'  date  for  the  amount,  Avhich  Hodges  accepted  On  the  2d 
September,  1796,  HrJges  also  purchased  at  6  months'  credit  of  the  defendants  200 
barrels  of  tar  for  230/.  for  which  he  g-ave  the  defendants  his  acceptance  to  their 
draft  dated  6th  September,  1796,  at  six'months'  date.  Tlie  first  mentioned  bill  for 
430/.  became  due  on  the  6ih  November,  1796,  which  Ho  'ges  was  not  able  to  pay, 
but  on  the  9th  of  the  said  month  he  g-ave  the  dt  fendants  a  bill  upon  Walpole  and 
Co.  for  100/.  die  the  Ilth  of  December  foUnvinr-,  and  on  the  following  day  {No- 
•uember,  lOJi)  indorsed  and  gave  defendants  a  bill  of  exchange  drawn  by  him  on 
and  accepted  by  Bulloch  and  Son,  dated  27tli  October,  1796,  at  six  weeks  after  date 
for  500/.  and  the  defendants  gave  him  the  following-  memorandum  or  undertaking: 
"  Memorandum  ;  I  promise  to  pay  to  Mr.  N.  Hodges  170/.  when  his  bill  on  Messrs. 
«  BuHock  and  Son  is  paid,  which  bill  I  received  November  10th,  1796,  (signed) 
«  Thomas  E'lht  and  Co.— Bill  dated  October  27th,  at  6  weeks,  f  ;r  500/."  It 
•was  not  in  the  contcm-^'lation  of  either  party  to  do  more  than  take  up  the  first  men- 
tioned acceptance  of  H,  Iges  with  tlie  bill  of  Bullock  and  Son,  and  therefore  ufier 
paym-jnt  of  what  wis  d  le  on  that  acceptance,  so  given  as  .aforesaid,  for  the  first 
iTi'^ntio'ied  parcel  of  goods,  the  residue  was  to  be  returned  to  Ho  Iges. — The  accept- 
ance by  Messrs.  Bullock  and  Son  for  500/.  became  due  on  the  11th  of  December, 
1766,  and  was  then  dily  paid  bv  them  to  the  defendants,  the  holders  thereof  ;  and 
the  abivementioned  b'll  on  WilpoleAwlCo.  for  100/.  was  likewise  paid  on  that 
d  -v.  On  the  13th  of  'D:icember,  1796,  a  commission  of  bankruptcy  issued  against 
H^  Iges  who  was  duly  declared  a  bankrupt,  and  the  nlaintiffs  were  chosen  assignees 
of 'I'S  est-\te  and  effects.  Tiiey  immediately  applied  to  the  defendants  for  payment 
of  the  170.''.  thev  had  been  overpaid  in  the  said  bill  for  500/.  on  Bullock  and  Son, 
pursuant  to  their  undertaking  above  stated,   when  they  objected  to  it   alleging 

(fl)  2  Bl.  Rep.  827.  (6)  Ante  2  'ool  141. 


APPENDIX.  53 

that  they  then  held  Hodges'  acceptance  for  230/.  above  mentioned,  and  claiming  a 
right  to  retain  the  said  UOl.  in  part  payment  of  the  same,  though  it  did  not  bt-come 
due  and  payable  tilltlie  9th  of  March  last,  when  the  six  months'  credit  for  the  goods 
sold  to  HoJges  (which  was  their  usual  credit  and  customary  mode  of  dealing)  ex- 
pired.    T  le  action  was  commenced  on  the  12th  of  Februar','  last. 

Rrakr  for  the  plaintiffs,  after  stating  the  question  to  be  wlicthcr  the  defendants 
^vere  entitled  to  set-ortthe  bankrupt's  acceptance,  or  rather  to  retain  tlie  170/.  the 
remainder  of  the  bill  for  500/.  towards  satisfaction  of  their  demand  on  the  b:inknipt 
for  230/.  the  price  of  the  goods  sold  by  them  to  him  on  the  2d  of  Septtmher,  1796, 
argued  in  the  negative.  This  question  depends  on  the  contract  between  the  parties 
made  on  the  10th  of  November,  1796.  Now  tlic  deposit  of  the  bill  for  500/.  with 
the  defend.ints  on  that  day  was  not  a  general  deposit  to  answer  all  demands  that 
they  might  have  on  the  bankrupt,  but  for  the  specific  purpose  of  securing  to  tlieni 
the  23J/.  the  remainder  of  the  value  of  the  first  goods  sold  by  them  to  the  bank- 
rupt ;  and  by  that  memorandum  the  defendants  expressly  agreed  to  return  the  over- 
plus of  170/.  to  the  bankrupt  as  soon  as  the  bill  for  500/.  was  paid.  Tl>e  attempt, 
therefore,  on  the  part  of  the  assig-nees,  to  retain  this  in  satisfaction  of  anotlier  debt  is 
in  direct  opposition  to  their  agreement ;  it  being  stated  as  a  fact  in  the  case  tliat 
nothing  more  was  in  the  contemplation  of  the  parties,  when  the  bill  for  500/.  was 
deposited  with  the  defendants,  than  to  secm-e  to  them  the  amount  of  the  bankrupt's 
first  acceptance  for  the  first  parcel  of  tlie  goods.  As  between  the  original  parties 
to  this  contract  it  is  clear  tliat  tlie  defendants  coid<l  not  have  had  any  lien  on  the 
bill  for  500/.  for  any  other  demand  tlian  that  expressed  in  the  memorandum  ;  and 
the  bankruptcy  of  Hodges  cannot  put  the  defendants  in  abetter  situation  than  they 
were  in  bcf)re.  It  will  be  contended,  however,  on  behalf  of  the  defendants  tliat  it 
is  immaterial  by  what  means  they  got  this  money  into  their  hands,  but  that  having 
got  it  they  are  entitled  to  set-ofi"their  second  demand  against  it  by  virtue  of  the  stat. 
5  Geo-  2.  c.  30.  j.  2S.(fl)  And  it  cannot  be  denied  but  that  some  debts  may  be  sot- 
oft"  im.ler  this  statute  that  were  not  due  at  the  time  of  the  bankruptcy  on  tiie  ground 
of  tiiere  being  mutual  credit  between  the  parties  ;  as  in  tlie  cases  Ex  Parte  Prcs- 
cott,  1  Atk  230;  French  v.  Fenn,  Tr.  23  Geo.  3.  B.  R.  and  Smith  v.  Hodgson,  ante  4 
vol.  211.  But  on  examination  it  will  be  found  that  this  c:;se  docs  not  come  within 
the  meaning  of  the  statute  respecting  "  mutual  credit ;"  for  that  only  applies  to  ca- 
ses where  mutual  credit  has  been  given  in  the  ordinary  course  of  commercial 
transactions  :  whereas  this  is  not  a  case  of  that  description,  the  bill  for  500/.  liaving 
only  been  deposited  with  the  defendants  for  a  particular  purpose.  Tlie  property  in 
that  bill  was  never  in  the  defendants  for  a  single  moment  ;  they  held  it  merely  as 
ti-ustees  for  the  bankrupt.  But  even  if  this  were  a  case  of  mutual  credit,  the  de- 
fendants are  not  entitled  to  retain  tlie  overplus  of  170/.  by  reason  of  their  express 
stipulation.  Suppose  tlie  defendants  had  undertaken  to  pay  this  surjdus  to  a  third 
person,  instead  of  the  bankrupt,  there  would  have  been  no  jiretence  to  say  that  they 
could  have  retained  it  on  the  groimd  of  their  having  another  demand  on  the  bank- 
rupt;  ancTif  not,  they  cannot  retain  it  as  against  the  asbignecs  of  tlie  bankrupt. 

Gaily,  contra,  was  stoppc<l  bv  the  court. 

Lord  Ken-yon-,  Ch.  J.  The"  statute  5  Geo.  2.  c.  30.  *.  28.  enacts,  that  where 
there  are  either  viutual  credits  or  mutual  debts  between  the  banknipt  and  any  other 
person,  one  debt  may  he  set  off  against  another,  and  only  the  balance  elaimed. 
Now  in  using  those  words  the  legislature  must  have  intended  something  more  than 
would  have  been  expressed  by  "mutual  debts"  only  ;  and  the  jlecisions  referred  to 
show  that  this  construction  has  been  put  upon  tlii;:  act.  I  agree  to  what  was  said 
by  Mr.  J.  .flu//er  inone  of  thecases,  that  where  there  is  a  tnist  between  both  pariie* 
there  is  a  mutual  credit.  Justice  also  requires  that  the  whole  account  t)n  Itoth  M(h» 
should  be  stated;   and  that  tlic  balance  should  be  the  only  thing  to  coiistitnte  the 

(a)  Whieh  enacts,  thr.t  where  it  shall  appear  to  the  commissioners  that  tliere 
hatli  been  mutual  credit  given  by  the  l)ankiiii)t  antl  any  olhrr  pirsoii,  or  mutual 
debts  between  the  bankrupt  and  any  other  person,  at  anytime  before  huch  pernon 
became  bankrupt,  the  said  commissioners,  .ic.  shall  Mtate  the  account  Int ween 
them,  and  one  <lelit  may  be  set  against  anr)ther ;  and  what  shall  aplM-ar  to  be  due 
on  either  side,  on  the  balance  of  such  account,  and  on  setting  (turh  debtn  ngaiiul 
pnc  another,  a;idnu  m-jrc,  shall  be  claimed  or  p:ud  on  cither  side  rtti'ecU\cly. 


54  APPENDIX. 

debt.  In  my  opinion  the  case  Ex  parte  Prescott  was  properly  decided;  and  that 
lias  since  been  followed  by  a  series  of  determinations. 

Grose,  J.  It  has  been  objected  that  the  defendants  cannot  set-off  the  170/.  be- 
cause it  is  contrary  to  their  express  as^reement :  but  consider  that  the  bankrupt  by 
his  agreement  was  bound  to  pay  his  acceptance  for  230/.  at  a  future  day,  but  that 
his  bankruptcy  disabled  him  ;  that  was  a  credit  on  one  side ;  and  credit  was  con- 
stituted on  the  other  by  giving  a  bill  which  became  due  at  a  subsequent  time.  It 
is  clearly  therefore  a  case  of  mutual  credit,  and  it  is  just  that  one  demand  should 
be  set-off  against  lhe"other. 

Lawrence,  J.  Tliis  is  direct'y  within  the  authority  of  the  case  Ex  parte  Pres- 
cott. 

Per  Curiam.  Postea  to  the  defendants. 

Grimwoodv.  Barrity  M.  T.  36  Geo.  III.  A.  D.  1795.  5  T.  R.  460. 

D^BT  on  bond  for  1400/.  dated  July  20th,  1787-  The  defendant  craved  oyer  of 
the  condition,  which  w.is  that  the  bond  should  be  void  on  payment  of  700/. 
on  ',1e  24th  of  June,  1788,  together  with  lawful  interest  for  the  same  from  the  24th 
of-yune,  then  last ;  and  then  pleaded,  first,  that  there  was  due  from  him  to  the 
plaintiff  on  the  bond  "  a  much  less  sum  than  1400/.  to  %vit,  the  sum  of  735/.  and  no 
more  ;"  and  that  tlie  plaintiff  at  tlie  time  of  exliibiting  his  bill  was  indebted  to  him 
(the  defendant)  in  a  much  larger  sum  of  money,  to  wit,  1200/.  for  goods  sold  and 
delivered,  &c.  which  he  is  ready  to  set-off.  He  also  pleaded  that  on  the  20th  of 
July,  1787,  it  was  corruptlv  agreed  between  him  and  the  plaintiff  that  the  latter 
should  lend  him  700/.  to  be' repaid  on  the  24th  of  June,  then  next,  and  that  he  (the 
defendant)  should  pay  the  plaintifl'  interest  at  the  rate  of  51.  per  cent,  from  the  24th 
of  June,  1787,  to  the'24Lh  of  yiine,  1788,  namely,  one  yeai-'s  interest,  and  give  a 
bond  for  securing  payment  of  the  whole  ;  and  that  in  pm-suance  of  the  said  coiTupt 
agi'eement  the  bond  in  question  was  given. 

To  tiij  first  olea  the  plaintiff  replied,  that  there  was  due  on  the  bond  more  than 
735/.  namely  835/.  0*  71 ;  concluding  to  the  country  ;  and  he  traversed  the  corrupt 
agreement  mentioned  in  the  second  plea.  The  defendant  demurred  specially  ;  for 
causes  of  demurrer  to  the  replication  to  the  first  plea,  (he  said)  that  the  plaintiff 
had  not  by  his  replication  given  any  answer  to  tlie  plea,  nor  admitted  or  denied 
that  the  plaintiff  was  indebted  to  the  defendant  in  manner  and  form  as  in  the  plea 
alletred.  The  causes  of  demurrer  to  the  replication  to  the  second  pica  were,  that 
the  plaintiff  had  not  in  his  replication  given  any  answer  to  the  plea,  or  denied  that 
by  the  condition  of  the  bond  there  is  expi-essly  reserved  above  the  rate  of  51.  per 
cent.  &c.  for  a  shorter  time  than  a  year,  8cc. 

Morgan,  'r\  support  of  the  demurrer.  First,  the  defendant,  having  pleaded  that 
the  sum  of  7o5l.  under  a  videlicet  w  is  due  on  the  bond,  was  not  bound  to  prove  that 
tliat  specific  sum  was  due,  but  it  was  competent  to  him  on  that  allegation  to  prove 
either  a  gi-eater  or  a  less  sum  ;  and  therefore  that  averment  was  not  traversable  In 
the  replication.  In  this  respect  tins  case  is  distinguishable  from  that  of  Sjinmons 
V.  Knox,{a)  where  it  was  lield  that  an  averment  that  a  precise  sum  only  was  due 
on  the  bond,  was  traversable  ;  for  there  It  was  not  laid  under  a  videlicet.  Second- 
ly. This  appears  to  be  usvu-y  m  the  condition  of  the  bond  itself;  for  a  year's  in- 
terest is  reserved  on  a  particular  sum,  though  the  forbearance  Is  stated  to  be  for  a 
less  time  than  a  ye.ar,  nam.ely  from  20th  of  July  to  the  24th  of  June  following.  And 
e%-en  If  the  plaintiff  had  intended  to  show  that  the  money  \\  as  not  lent  on  tlie  day 
when  the  bond  was  given,  according  to  the  ])rinclple  established  in  Collins  v.  Blan- 
tem,(^b)  he  should  have  protested  against  the  corrupt  agreement,  and  pleaded  that 
the  money  was  lent  on  the  24th  of  June,  1787,  for  a  year,  but  that  the  bond  for  se- 
curing it  was  not  executed  until  the  20th  of  July  following. 

Dampitr,  contra.  The  case  of  Sy7mnons  v.  Kno.\  must  govern  this  ;  it  being  im- 
material in  such  a  case  as  the  present  whether  the  sinn  be  or  be  not  pleaded  under 
a  videlicet.  For  though  the  want  of  a  videlicet  may  in  some  cases  make  an  aver- 
ment material  which  would  not  otherwise  be  so,  yet  the  addition  of  a  videlicet  can- 
dot  render  a  material  averment  immaterial, (c)  or  prevent  the  ad\  erse  party  deny- 

(a)  Ante  5  vol  65.  (6)  2  jnls.  347.  (c)  Vld.  1  Saund.  169. 


APPENDIX.  55 

ing  it.  With  respect  to  the  other  point :  tlie  corrupt  agreement,  which  is  stated  in 
the  ple:i,  is  denied  in  the  replication  ;  and  tliere  being- "u  demurrer  to  tluit,  tite  non- 
existence of  :uiy  corrupt  agreement  is  admitted  on  the  record.  Therefore,  the  de- 
fendant, to  maintain  tliis  demurrer,  must  pro^e  that  the  loan  of  money  secured  by 
a  bond  dated  yulj'  20th,  and  conditioned  for  the  pajnient  of  a  sum  of  money  with 
interest  at  5/.  per  cent,  calcidated  frotn  a  past  day,  must  necessarilj  have  been  made 
on  the  day  when  tlie  bond  was  g-ivcn,  and  tluit  this  is  so  necessMy  a  conclusion  of 
law  that  adcniid  of  the  fact,  and  thatdeni:d  admitted  on  tlie  record,  cannot  wciph 
ag-ainst  it.  But  tliat  is  in  eO'ect  saying  tiiat  tlie  court  are  bound  to  infer  corruption 
against  the  fact,  when  that  iact  is  admitted  on  the  record  It  might  equally  be  said 
that  in  an  action  on  the  statute  against  usury  for  a  penalty  this  bond  wi  uld  be  con- 
clusive evidence  cf  usury  against  the  plaintiif,  notwithstanding  he  could  prove  tiiat 
the  money  was  in  fact  lent  on  the  24th  of  jfune,  1787.  In  Collins  v.  Blanttrn  it 
was  hehl  that  an  unlawful  consideration  miglit  be  aven-ed  against  a  bond  which 
Was  good  on  the  f  ice  of  it :  then  here  tlie  ])laintifl'  may  aver  a  lawful  consideration 
consistent  with  and  explanatory  of  the  bond. 

Lord  Ken'yoij,  Ch.  J.  Where  an  averment  is  material,  the  addition  of  a  vide- 
licet does  not  render  it  immateriid.  And  on  the  other  point  there  is  not  the  least 
doubt  ;  the  defendant  might  have  taken  issue  on  the  corrupt  agreement,  the  exist- 
ence of  which  was  denied  by  the  replication  ;  on  that  issue  tlie  whole  case  might 
have  been  gone  into  before  the  jury.  But  on  this  record  we  must  take  it  for  gran- 
ted that  the  money  was  in  fact  lent  in  yuiis,  tliou'gh  the  bond  was  not  given  until 
^m/c.     And  the  justice  of  tlie  case  periLctly  coincides  with  our  determination. 

Grose,  J.  This  plea  being  founded  on  the  statute  8  G.  2.  r  24.  s.  5.  it  was 
necessary  for  the  defendant  to  show  how  much  was  due  on  the  bond  :  he  accord- 
ingly pleaded  that  the  sum  of  735/.  and  no  more  was  due,  and  this  was  traversable 
according  to  the  case  of  Synnnoiis  v.  Knox.  But  it  is  said  that  the  averment  of  the 
sum  here  is  laid  under  a  videlicet,  which  was  not  the  case  in  Summons  \.  Knox  .- 
but  the  rule  is,  that  where  any  tiling  in  pleading  is  material,  it  is  not  rendered  less 
material  by  its  being  pleaded  with  a  videlicet ;  it  is  still  traversable  ;  and  therefore 
this  case  must  be  go\  erncd  by  that  of  Sjmino7nt  v.  Knox.  With  respect  to  the  other 
plea  of  usury  ;  the  corrupt  agreement  is  denied  by  the  plaintliT.  It  is  however  con- 
tended that  notv.'ithstanding  that  denial  it  must  be  understood,  from  what  appears 
upon  tlie  face  of  the  bond,  that  there  w:is  an  usurious  agreement,  because  the  court 
must  infer  that  the  money  was  lent  on  the  day  when  the  bond  was  given  :  but  such 
an  inference  is  contrary  to  the  fact  ;  it  is  not  alleged  that  the  money  was  lent  wiien 
the  bond  was  given  ;  and  on  the  contraiy  it  is  admitted  by  the  demurrer  that  therr- 
was  no  such  usurious  agreement  as  is  stated  in  tlie  plea,  and  if  so,  the  money  wa.s 
not  lent  on  the  day  that  the  bond  bears  date. 

Lawrence,  J.  As  to  the  last  point  :  the  plea  consists  of  two  parts  ;  it  first 
states  that  there  was  an  usurious  contract  between  the  parties,  and  tiicn  allegis  that 
the  bond  was  given  in  ptusuance  of  that  agreement.  It  was  sufficient  for  the  plain- 
tiff to  dcnv  cither  of  these  p^arts  in  his  replication,  becau.se  both  were  essentisd  t«» 
establish  the  plea  :  and  the  plaintiff  having  traversed  the  corrupt  agreement,  the 
defendant,  if  he  iiad  meant  to  rely  on  its  existence,  should  have  taken  issue  on  it  : 
whereas,  by  demurring  to  the  replicativin,  he  has  admitted  that  there  was  no  such 
agreement.  With  regard  to  the  other  plea  :  it  was  necessary  for  the  defendant  u> 
show  the  real  sum  due  on  the  Ixnid  to  entitle  him  to  liis. set-off:  and  it  w:is  decided 
in  Sjmmons  v.  Knox  that  the  averment  of  that  sum  was  traversable.  The  <iuestioii 
therefore  here  is.  Whether  the  introduction  i.f  tlie  videlicet  in  this  cas*-  makes  any 
difference  ;  but  it  certainly  does  not.  That  it  does  not  render  an  averment  imma- 
terial, whicli,  without  the  videlicet  is  niaterial,  has  been  decided  in  many  r»»cs. 
In  yofiruon  V.  Piciet  and  another,(«)  which  was  an  action  on  the  statute  uguinsl 
usury,  tlie  agreement  to  forbear  and  give  day  of  pujment  was  stated  in  the  dorla- 
ration  to  be  on  the  14tli  und.-r  a  videlicet,  but  it  was  jiroved  tjiat  the  mc.nev  was 
not  advanced  until  the  16th;  on  which  Lord  A/ww.y/c/,/ nonsuiteil  tlie  plaintiff, 
being  of  opinion  that  thi-  day  from  wlience  tlie  forbearance  took  |)lacc  was  ninti  rial, 
though  laid  luuiiT  a  vid.  licet  ;  and  on  a  motion  for  a  new  trial  this  ourt  confirnifd 
the   decision  at  Nisi  Piius.     So  in  the  ctsc   of  Pofie  v.  Fo*icr,i/>)  which  w*»   an 

(a)     F..  '1%  Go.  .".  n  U  ('•)     Arte  4  vol.  590. 


56 


APPENBIX. 


action  for  a  malicious  prosecution,  the  declaration  stated  tliat  the  indictment 
"  afterwards,  to  ivit,  on  the  25th  oi'  February  1791,  came  on  to  be  tried  ;"  by  the 
record  of  that  indictment  it  appeared  that  tlie  trial  was  on  a  diflerent  day  ;  on 
which  the  plaintifi'  was  nonsuited  ;  and  on  a  motion  to  set  aside  that  nonsuit,  this 
court  thought  the  objection  fatal,  "  though  it  were  laid  under  a  videlicet,  the 
day  being  material" 

Judgment  for  the  Plaintiff 


INDEX. 


A 


CCOUNTS. 

connected,  1 . 

unconnected,   1 . 

how  balanced  in  bankruptcy,  56. 


ACTION. 

how  far  debt  must  be  due  at  commencement  of,  15,  17,  35. 

in  wliat  a  set-ofi"may  be  given  in  evidence,  19. 

for  arrears  of  annuity,  20. 
ADMINISTR.\TOR,   15,  18,23,34. 
AGENT  and  PRINCIPAL,  23,  29. 
AGREEMENT. 

special,   19, 
ANNUITY,  20. 
ARREST. 

illegal,  without  deducting  an  opposite  demand,  5. 
ASSIGNEE  of  bail  bond,  28. 

of  bankrupt,  49,  61. 
ASSUMPSIT. 

for  general  damages,  19. 

for  a  sum  certain,   19. 
ATTORNEY. 

his  lien  in  K.  B.  and  C.  P.  12. 

his  bill  when  to  be  set-off,  36. 
AUTER  DROIT,  18,  24,  51. 

BAIL  BOND,  28. 

BANKRUPTCY,  46. 

BILL  of  EXCHANGE,  49,  5  5. 

particulars,  63. 
BOND. 

joint  and  several,  25. 

bail,  28. 

of  indemnity,  54. 

CASE,  18. 

CO -M  .MISSION,  del  credere,  30. 
CO>4NECTED  ACCOUNTS,   1. 
CONTINGENT  DEBTS,  53. 
CORPORATION,  27. 


58  INDEX. 

COSTS. 

interlocutory,  5. 
COVENANT,  action  of,  19. 
COUNTRY  CAUSES,  Set-off  in,  40. 
COURT,  inferior  and  superior,  o7 . 

payment  of  money  in,  40. 
CREDIT,  mutual,  47. 

DAMAGES. 

liquidated,  21. 

unliquidated,  21. 
DEBTORS,  insolvent,  46,  59. 
DEBTS. 

contingent,  52. 

extinguishment  of,  20. 

joint  and  several,  23,  61. 

mutual,  15,  18. 

of  plaintiff,  18. 

on  bond,  19. 
DEFENDANT'S  demand,  18,  20. 
DELIVERY  of  GOODS. 

set-off  before,  21. 
DEMAND,  equitable,  48. 
DEMURRER,  44. 
DETINUE,  18. 

DISCHARGE  from  execution,  20. 
DIVIDEND  in  Bankruptcy,  55. 

EQUITABLE  SET-OFF. 

at  laM-,  10. 

in  equity,  61. 

demand,  48. 
EXCHANGE,  bill  of,  49,  55. 
EXECUTION,  discharge  from,  20. 
EXECUTOR,    15,   18,  23,  34,  40. 
EXTINGUISHMENT  of  DEBT,  20. 

FORFEITURE  of  penaltv,  54. 

FORTY  SHILLINGS,  debt  reduced  to,  by  set-off',  37. 

GENERAL  ISSUE,  15. 
GREAT  SEAL,  57. 

HUSBAND  and  WIFE,  23,  33. 

INDORSEMENT  of  BILL,  56. 
INSOLVENT  DEBTOR,  46,  59. 
INSURANCE,  i^olicy  of,  55. 
INTERLOCUTORY  COSTS,  set-off  of,  5. 
INTESTATE,  15,  18,22. 


14. 


INDEX.  59 

JOINT  and  SEVERAL. 

bond,  25. 
debtors,  23. 
JUDGMENT. 

Set-off  of,  at  common  law. 

in  different  courts,  7. 
different  sorts,  8. 
equitable  demands  on,   10. 
under  the  statute,  36. 
entry  after,  45. 
JURISDICTION  of  COURT,  37. 

LEGACY,  48. 
LIEN  in  general^  49. 

of  attornetf.)   12. 

in  K."  B. 

inC.  P. 
LIMITATIONS,  statute  of,  20,  45. 
LIQUIDATED  DAMAGES,  21. 

MALICIOUS  PROSECUTION,  5. 
MONEY,  payment  into  Court,  40. 
MOTION,  set-off  bv,  6. 
MUTUAL  credits,  47, 
debts,   15,  17. 

NOTICE  of  SET-OFF,  15, 

at  wluit  time  it  must  be  given,  41. 

general,  41. 

special,  41. 

generally  given  in  country  causes,  4 1 . 

nature  of,  40. 

OPTION,  defendant's,  to  set-off,  37. 

P  \RTICULARS,  Bill  of,    67. 
PARTNERS,  23,  24,  25,  26. 

dissolution  of,  61. 
PAYMENT  of  Money  into  Court,  40. 
PENALTY. 

in  speci  »lty,   15,  40. 

forfeited  at  law,  54. 
PEPJURY,  5. 
Pi.AINTU- 1- 'b  demand,   18. 
PLEA  of  SET-OFF,   1 5,  44. 

in  t^eneral,  44. 

in  the  case  of  a  specialty,  45. 

whetlier  pleadable  after  rule  lo  abide  by  plea,  4U. 
rule  to  abide  bv,  40. 
PLEADlNi;  SK'I-oVf. 

ill  baiikiuj)i(:y,  46. 

niofic  of,  3.). 

wncn  obii^jalory  or  optional,  15,  40. 


60  INDEX. 

when  defendant's  demand  is  the  greatest,  40. 

or  tiie  least,  40. 
PRACTICE,  63. 

PREFERENCE  of  Notice  or  Plea,  40. 
PRINCIPAL  and  AGENT,  23,  29. 

and  Surety,  55. 

REPLEVIN,  18. 
REPLICATION,  44. 

SEAL,  Great,  57. 
SET-OFF,  at  Law. 

common,  5. 

by  statute  in  general,  15. 
SPECIALTY    15. 

STATUTE  of  LIMITATIONS,  20. 
SURETY,  53. 
SURPLUS,  61. 
SURVIVORSHIP,  54. 

TESTATOR,   15,  18,  22,  39. 
TORT,  18. 
TRAVERSE,  43,  45, 
TRESPASS,  18. 
TRUSTEES,  23,  27. 

UNCONNECTED  ACCOUNTS,  1. 

are  the  subjects  of  set-off,  1 . 
UNDERWRITER,  55. 
UN  LIQUID  ATD  DAMAGES,  21, 
USURY,  48. 

VERDICT,  38. 

WAIVER  of  SET-OFF,  37. 
WIFE  and  HUSBAND,  2o,  33. 


F  I  J\ri  S. 


000  744  287 


m 


11 


m 


I 


m 
W 


U.> 


u 


;,/'  (  '' 


